Edwin Ankomah-Ahenkan’s thoughts…..Is breaking MTN industry dominance a misdirection?

Edwin Ahenkan

It is an undisputable fact that competition exists in every field, and remains an important tool in many industries. Competition leads to innovation, product quality, and improved customer experience among others.

Every company in their respective industry is usually compelled to compete for customers and subsequently turn them into loyal advocates. The beauty of competition is that it alleviates complacency and encourages organisations to strive hard.

Significantly, competition is the rivalry between organisations using different or similar products to solve the same customer pain with the aim of achieving profit and market growth. Companies should not be penalised for their business successes in a fair competitive market; but the NCA believes that the dominance of MTN prevents other industry players from competing fairly, hence the need to break its near-monopoly in the telecom sector.

On June 8, 2020, through National Communications Authority (NCA), government announced its intention to begin implementing specific policies within the telecommunications industry to provide a level-playing field for all network operators, as well as reduce the dominance of MTN Ghana in the industry.

According to them, this decision was to curtail the growing control of MTN due to its negative impact on competition and consumer choice, while acknowledging its contributions in the telco industry over the years.

Considering the telecom market report by the NCA in January 2020 when MTN dominated the Mobile Voice Market Share (55.95%), Market Share 4G operators (91.39%), and Market Share Mobile Data-2G & 3G (72.01%) compared to its competitors, it is arguable that their competitors would be unperturbed. According to the report, the percentage distribution of Mobile Voice Market Share across various networks was 55.95% (MTN), 21.93% (Vodafone), 20.37% (AirtelTigo) and 1.75% (Glo). The Market Share (4G operators) statistics were found to be 91.39% (MTN), 6.78% (Vodafone), 1.70% (Surfline), 0.1% (Blu), 0.07% (Telesol) and 0.04% (Broadband home), while the Market Share Data-2G & 3G, recorded the following figures; MTN (72.01%), AirtelTigo (14.33%), Vodafone (12.73%) and Glo (0.93%).

One would agree that based on these reports it is imperative to ponder questions like how did MTN come to dominate the Ghanaian Telecommunication industry? What were/are their marketing strategies? What were/are their point/s-of-difference? Did they achieve this dominance through perfidious strategies?

Even so, it is astonishing to note that MTN was not the first company in the industry. State-owned Ghana Telecom and its subsidiaries – acquired by Vodafone – ran a monopoly until Scancom (MTN) arrived and began to dominate.

The former could have taken advantage of heritage as its differentiating idea – heritage provides an imitable strength to make one’s offering break away from competition. It is a potent differentiating idea in that there seems to be an innate psychological relevance in having a long history – one that gives people a sense of security with their choices. Despite the potency of heritage as a differentiating idea during that period, MTN identified the gap in their competitors’ strategy that gave them an edge over them in the market.

As such, they devised new marketing tactics which inextricably blend consumer-comforting tradition with the advancement pivotal to continued success. Among these tactics was the ability to penetrate the market with their lower cost and the convenience in making a purchase. They also made good use of customer perceived value, which helped build customer loyalty. Interestingly, they applied the basic law of category in marketing, which states: “If you cannot be first in a category, set up a new category you can be first in and promote that category”.

Undoubtedly, being first in the minds of prospects is better than being first in the marketplace. In the minds of prospects, MTN Ghana happened to be the first to demonstrate that a SIM card could be purchased at a price lower than the existing prices effortlessly; first in 3G Internet connectivity; first in 4G Internet connectivity; first to upgrade to 4G+. In effect, one could argue that they were first to attract the attention of customers in significant categories of the Telecommunication industry – and without relenting.

Importantly, companies wishing to establish a firm foothold on the Telecommunication industry’s ladder ought to evaluate the market leader’s strength and work toward providing a better alternative to overcome it.

In addition, they could also discover the essence of the market leader – and then decide to be different. Companies aim to create value for their shareholders; their tactics aim at making profits and satisfying customers concurrently.

Nonetheless, if customers feel dissatisfied by a service delivery they can switch to a competitor. Government can reduce the barriers to entry into the telecommunication market to attract other companies, or regulate the entire industry for efficiency and not necessarily target and break MTN’s dominance – as that could result in penalising marketing creativity, impeding technological innovation, and creating negative investor sentiment.

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