Dominance of MTN; Why did the others Fail to Compete

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Source: GITFIConline.com

By Alexander Nyarko Yeboah

Tema, July 2, 2020—A glance through most streets of the capital cities of Ghana reveals MTN’s bright yellow colours spread across—on shops, billboards, walls, etc.—attesting to the importance of this colour to the socio-economic life of the people.

Their workers, and others, are regularly seen wearing yellow Tee shirts whilst one is greeted on some streets by the yellow flags that line those streets in an amazing display of glamour, and in the midst of this adorable color one could see the MTN logo displayed in an inviting and captivating manner.

This display of glamor tells only one story—MTN has not only come to stay but has emerged as a market power in Ghana.

And while this superb growth is taking place in MTN, all other networks in Ghana seem to be falling apart; Kasapa had dwindled, Tigo and Airtel have to merge to avoid collapse, etc.

This development calls for a lot of attention because of its power to destroy competition in the telecommunication industry such that, with time, the abbreviation MTN is going to be synonymous with telecommunication in Ghana.”

What then is causing this; why are all others unable to penetrate the Ghanaian market? An Economist and Consultant, Mr. Isaac Doku says, “‘Good will’ was one cause accounting for why the large market share; everybody wants to associate with the MTN brand. MTN was accessible in every district, unlike the other networks which gave them grounds before other networks came in.”

This ‘good will’ enjoyed by MTN is so pronounced that most Ghanaians are stubbornly united behind the MTN brand. “In an oligopoly market, even if prices of other competitors are cheaper, people would still prefer the higher prices of the market leader because they are dictating to the market.” Mr. Doku, who is also a Lecturer at the Data Link University, explained.

The seemingly abysmal performance of the other networks in Ghana was pronounced when, government introduced the interoperability principle which would have allowed MTN subscribers to port to other networks with perceived cheaper services whilst still retaining their most adored 0244… numbers, yet people still stuck to their loyalty to MTN such that that system could not work.

“The problem was even when MTN mobile money started; it was only MTN then. even now MTN mobile money is the most accessible with the others making people struggle before they could cash their money,” Mr. Doku explained, which points to only one fact that the other networks were not doing enough to take advantage of the booming Ghanaian telecommunication industry.

 This was perhaps the reason why the Ghana Government has decided to come in and level the playing field which agrees with the assertion of Mr. Doku who avers that, “Anything that affects majority of people in the country is of concern to government. So if you have a company that is wielding so much power to control the whole country, it’s a problem to government because the exit of MTN could throw the whole country into a turmoil.”

To be a significant market power, MTN can be leading by way of price or market share. “So most of the telecom companies are now being dictated to by MTN. If MTN makes any move, they would all conform.”

            This certainly has ramifications to the Ghanaian local telecommunications industry and the wellbeing of the economy in general. Currently, MTN has greatly advanced whilst all other networks have dwindled such that MTN now controls about 75% of the market share.

It means that Ghana would be limited in its drive to advance the telecommunication industry with all the innovations that came with it. This is because, it was only MTN which was developing and therefore would not be mindful of bringing out the best of innovations because anything it brought up would hold without competition.

Again, the kind of variations Ghanaians need to spread the market would be absent with MTN determining the pace of Ghanaian telecommunication advancement all alone. This means that Ghanaians have no choice than to stick to the good and bad performances of MTN.

Then MTN is set to make the people suffer economically, a fact attested to by Mr. Doku when he says that, “Chances are that they are going to make the people poorer. This is why government is worried because MTN is wielding a lot of power as price leaders, and therefore any price they come up with one has no option than to comply. If that is happening, then they are going to impoverish the people.”

All this has happened because the other network companies have failed to take advantage of the open market system in Ghana which was to allow as many companies as possible to compete and serve as checks to each other and bring out the best in the industry.

But what we see is mediocre on the part of the other networks which makes MTN have total control over the market. The others failed to break the ‘goodwill’ MTN enjoyed in Ghana, failed to evolve strategies that would have made them credible alternatives to MTN, etc. which meant that the ground was left for MTN to explore as much as it could.

What eventually awaits the Ghanaian economy is that all other networks could be thrown out of business with only MTN remaining in the industry, and that is perhaps the wisdom in government deciding to come in.

It is about time more serious telecommunication networks took up the challenge and competed in the Ghanaian market to level the playing field and give MTN the competition they needed. It is possible, that after efforts by government to create fairness of the market and reduce MTN to the level of the others, other networks may still not take advantage of the government’s intervention may still give MTN the nod to continue its dominance of the Ghanaian telecommunication market.