Home > Feature
 
Telecom price war in Ghana – reading in between the lines
From: Samuel Nii Narku Dowuona/Adom News/Ghana          Published On: August 25, 2011, 13:25 GMT
 
  Comments ()     Email     Print  

     
 




There is a telecom price war going on in Ghana; it may not be a direct war in terms of drastic reductions in local call rates but in the form of tariff plans, which promise value for money.

But a closer look at, and comparative analysis of some of the plans would show they do not deliver any real value to the customer as promised in the loud ads and commercials, which are designed to cause people to rush into patronizing those offers long before realizing they are victims of marketing gimmicks.

AIRTEL

When Airtel entered the African market last year, their group CEO in India made a promise that they would not engage in a price war in Africa. Just weeks after that promise, Airtel Ghana reduced their local call rates to 8Gp per minute for both on-net and off-net calls to mobiles and landlines at both peak and off-peak periods.

That one sneeze from Airtel has sent every telecom operator coughing; and the battle has even been severed by the launch of Mobile Number Portability (MNP). And speaking of MNP, it is gradually making nonsense of all the on-net call offers. With MNP one cannot be sure if a 020 to 020 call is necessarily an on-net call. It could as well be an off-net call if the second 020 had ported to another network without the knowledge of the caller.

Airtel itself has since the start of the tariff war, launched a number of offers; some giving as low as 4Gp per minute of calls to paired numbers in a double SIM pack on sale at Airtel.

Obviously, that 4Gp offer is for calls to only one number on Airtel and no other number. This clearly does not give much value to those who do not buy double SIM pack, and definitely not for those who do not call that paired number as often as they call others.

Airtel also has a Magic Number offer, for which one needs to register a special Airtel number and pay GHS 2.99 every month to be able to call that number for free within that month.

Again, this may not have much value for customers who call off-net numbers more than that one Airtel magic number. Some customers have numbers which they already call very often and those numbers may not necessarily be Airtel numbers. Some too do not even use up to the GHS 2.99 calling that magic Airtel number in 30 days.

There is something called Airtel Magic Time and Magic Sunday, which are essentially limited periods within which one can make calls and pay only 4Gp per minutes. Again, the limitations kill the value.

But it still does not take anything away from the fact that Airtel gives great value in enabling customers to call off-net numbers for only 8Gp per minute; the most affordable default rate on the market.

MTN

The market leader, MTN is either the first to start something or first to flex some muscles after a competitor starts something like Airtel did. MTN responded to Airtel’s 8Gp offer by launching four new tariff plans and also subtly converting MTN Zone into a fifth tariff plan without telling consumers.

It is important to state that the default tariff for off-net calls on MTN is 12Gp per minute, which is over 33 per cent higher than Airtel’s.

But MTN Zone is a plan that could give customers as low as 1Gp per minute of call depending of the time of day the customer makes the call. MTN Zone is great, but MTN claims there are times when customers get 100 per cent discount (zero charge) on MTN Zone. This writer is yet to meet one customer who says he got zero charge on MTN Zone. Some speak of up to 98 per cent discount.

The 1Gp on MTN Zone is between 5am and 8am in the morning. It looks very good on face value, but there is a clear limitation on when one can benefit, and the period given is when people are usually either sleeping, preparing to go to work, in traffic to work, or have just arrived at the office and preparing to start work so have little or no time to make calls. It would be interesting to know from MTN how many of their near 10 million subscribers use this flamboyant-looking offer.

Besides, that offer is only for on-net calls, but in these days of MNP, how can the subscriber tell that, that 024 or 054 number is really an MTN number? These are things MTN will not tell the customer and one calls, thinking they are making and on-net call, only to be told in a few minutes that “you have one minute remaining”.

But truth be told, MTN Zone may not have everything it is said to have, but it is a great tariff plan because this writer, like many others, has personally experienced 3Gp per minute call on MTN Zone on a number of occasions.

The other four tariff plans on MTN are Xtra Connect, So Cool, Talk a Lot, and Talk Biggest. For the first three, MTN gives between 9Gp and 6Gp for on-net calls, and maintains off-net calls tariff at 12Gp per minute. But usually those tariff plans are promoted with the on-net offers, and nothing is said about the 12Gp for off-net calls.

The confusion about these three plans is that they offer different tariffs for the first three minutes and then a different one from the fourth minute onwards. The question many subscribers ask is that “how does one know that he is being billed less on the third minute and lesser from the fourth minute?” In other words, why these confusing tariff plans, which do not yield to easy monitoring by consumers, particular in an industry where overcharging of tariffs is a big concern because automated systems are unreliable?

But the most interesting one is the Talk Biggest, which is very loud, but proves to be of no much relevance and value to any serious customer.

Talk Biggest offers 3 minutes extra on every GHC1 recharge for prepaid customers. So if a customer recharges GHC2 he gets 6 extra minutes, and so on. But the bonus minutes are valid for only one day and limited to calling one MTN number of the customer’s choice.

Customers who buy their credit through MTN unit transfer machines have their Talk Biggest bonuses accumulated over one week and they have the weekend to consume all that bonus credit calling just one MTN number or lose it.

So if one does not have any reason to call that one “special” MTN number within one day, or at the weekend, then one loses the bonus and MTN takes it back. The question then is what is so special about that offer, that it is called “Talk Biggest”? So many limitations and yet MTN has given it such a flashy name.

When customers raise questions, they are told “we gave you a gift, you did not pay for it, so we are telling you to use the gift at a certain time or within a certain period or lose it.” And customers are also asking “why do you call it a gift if you have all these limitations designed to prevent us from enjoying that gift?”

A similar strategy is being applied to the recent MTN offer of five free SMS’s for every 50Gp spent on MTN. The free SMS’s are accumulated to the weekend and the customer is expected to either use all of those accumulated bonuses over the weekend or lose it. How realistic can that be, and of what value is that kind of offer to customers if they cannot have the time to enjoy it at their own convenience.

VODAFONE

Vodafone Ghana currently charges 14.4Gp per minute of local call. But Vodafone compensates for that with their Double Bonus and Double Value offers. Double Bonus gives all first time customers 100 per cent bonus on every recharge for their first three months on Vodafone. So, mathematically speaking, it works down to 7.2Gp per minute for both on and off-network calls on Vodafone.

Whereas other operators limit customers on what they can use their bonus credit for, Vodafone allows customers to use the bonus credit for local and international calls to all destination, browsing the internet, SMS, MMS and everything else. They also give customers seven days to use the bonus credit, whereas others give between one and two days.

Double Value on Vodafone allows customers who want to continue enjoying double bonus after the first three months to just register by dialing 5050 and paying GHC1.99 every 30 days to get 100 per cent bonus on every recharge from GHC2 upwards, and 50 free SMS’s to Vodafone numbers. On-net SMS cost 4Gp on Vodafone, so it means the GHC1.99 is actually paying for the SMS’s and the customer gets double bonus credit valid for a maximum of 30 days.

It is important to compare Vodafone’s Double Bonus to Airtel’s three months Double Value for new customers. Vodafone gives 100 per cent bonus on every recharge within the first three months, but the Airtel so-called double value for the first three months gives 100 per cent bonus only on the first recharge in every one of the three months. This means one gets only three bonuses in three months, whereas on Vodafone, one gets unlimited number of bonuses within the three months. What is Airtel up to?

Vodafone also has other tariff plans like Free Weekends, Extreme Value, Extra Value, and Supreme Value, some of which have similar features like the other networks have and there is no real value for the customers who want less money to do more.


TIGO

Tigo recently launched their 007 tariff, which gives 7Gp per minute for on-net call, but retained off-net call tariff at 12Gp. Interestingly, an official of Tigo boasted that 12Gp per minute for off-net calls makes Tigo second to Airtel in terms of affordable off-net calls. But MTN is offering same thing, so what is the boast – don’t the telcos know what competition is charging?

Tigo also has a bunch of tariff plans including Triple Balance for local calls, Triple Bonus for IDD and on-net calls, Stop the Clock and Tigo Super Zone.

Triple Balance and Triple Bonus are technically the same – they both give you 200 per cent bonus on every recharge, but the former is for local on-net and off-net calls only, whiles the latter is limited to international call to USA, China, UK, Canada and India, and on-net local calls.

The bonus credit is specifically for calls and nothing else, and the expiry date is two days for both offers. Again, the limitations interfere with the significance of the offer.

Stop the Clock allows customers to talk on-net for 10 minutes and pay for only three minutes, and off-net for five minutes and pay for only three minutes. That is not a bad offer at all, because it saves money either way.

But how many people talk on phone up to five minutes on regular basis? It would be great if they gave an offer in which the customer can save money right from the first minute.

Tigo Super Zone allows the subscriber to choose one location where she makes most calls. It could be the office, home, or school and calls from that location will cost as low as 4Gp; again, limited to one location.

EXPRESSO

The default rates on Expresso are 9.54Gp per minute for on-net calls and 14.88G per minutes for off-net, which is the highest in the industry right now. Until recently, Expresso (then Kasapa) did not have any part in the tariff war. But since they became Expresso, they have launched four new tariff plans called Shake Up. They comprise 1 Express, 7 Express, 30 Express and Expresso.

Under 1Express the customer pays GHS1 and enjoys free calls to Expresso numbers, five minutes free off-net calls; under 7Express the customer pays GHS 5 and for seven days gets free on-net calls, 30 minutes free off-net calls; 30Express offers 30 days of free on-net calls, and 160 minutes free off-net calls for GHS20, whiles Expresso offers free on-net calls for 30 days for GHS10.

All four are great plans, but Expresso as an institution has not proven to be very competitive since they came into the Ghanaian market, probably because they are the only CDMA network. They have in fact been losing customers on monthly basis. So this is an example of when great value gets a weak marketing drive, as against irrelevant offers on some of the GSM networks, supported by powerful and aggressive marketing.

Glo has confirmed they will launch next month. They have promised to bring real competition unto the Ghanaian market. They have a record of giving free calls for one month to all new customers when they started in Nigeria. Whether they would do the same in Ghana or not, is only a matter of time. But beyond that, Ghanaians would look forward to a long-term value for money offer, and not the flamboyant t but irrelevant types that are on the market.

It is important that customers paid closer attention to the offers flying around from the telecom operators to see the irrelevance of most of those offers and separate them from the good ones like MTN Zone, Vodafone Double Bonus and Double Value, Expresso Shake Up, Tigo Stop the Clock and Airtels 8Gp across board tariff.



Comments ( ): Have Your Say >>