Perfect competitive market in telecos is an illusion

Aleem is the Managing Consultant at Aliska Business Advisory and Research. [email protected]

In June 2020, Communication Minister, Ursula Owusu argued that, the telecommunication industry in Ghana is typical monopolistic competitive market.

She further argued that, the ministry is putting structures in place to open up the market for a fair competitive market that gives superior value to the customer.

It is prudent for the regulator and its supervised organisations acknowledge that the customer is the most important point in any production or service process.

Her assertion of Telcos is achieving customer intimacy is underlined by the advantages of a perfect competitive market. However, a perfect competitive market in the Ghanaian telecommunication sector is an illusion.

A perfect competitive market can be defined as a type of market that sellers, suppliers or producers sell the same products to the same market at the same price.

In this type of market, there exist a lot of sellers who have the same access to manufacturing or production information and strategy.

Characteristically, in this type of market suppliers or manufactures follow standardized method of production.

A typical example of a perfective competitive market is the hand sanitizer market in Ghana. On the other hand, a monopolistic competitive market is the type of market that is underlined by an imperfect market structure.

In this type of market suppliers or produces sell similar goods or services but these goods or services are not identical in its conformity to use or performance.

Additionally, producers in this market, produce products or services that are substitute to each other of which these products have a certain degree of difference.

The reason why the minister of communication thinks that a perfectly competitive market gives a superior outcome than a monopolistic competitive market is because in a perfect competitive market players tries to achieve customer intimacy by pleasing the market to breakeven whereas producers in the monopolistic market do not try to be innovative because they are price determiners and their products or services seems superior on the market than their competitors.

Any steps by the government to level the playing field for other players in the market would be a waste of resources.

Any approach to knock the market leader of its perch will set the precedent that the regulator celebrates mediocrity.

This is because the market leader used several years to build its brand, its systems, its marketing strategies and its competitive strategies in an effort to achieve quality, operational excellence and customer intimacy.

Other telecommunication firms have access to the same market as leader.

The services provided by Telcos in Ghana is analysed to establish if players in the market are bullied by market leader or the market leader does not strive to achieve quality, customer intimacy and operational excellence.

In light with the above, it can be concluded that the main reason why a perfect competitive market is superior than a monopolistic market is because of efficiency in production.

However, the failure for other players to gain major market share in the industry is not the responsibility or the liability of the market leader and the regulator should not indirectly punish the market leader for it.

It can be argued that, those with smaller market share failed to improve their systems, failed to join the mobile money business early, failed to improve their caller and/or internet services, failed to perform their corporate social responsibilities, failed to improve their customer service or the potential customer does not like their brand due to insubstantial reason (shegey reason).


Emmanuel Kweku Smend, [email protected]
Aleem is the Managing Consultant at Aliska Business Advisory and Research. [email protected]

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