Monday, January 16, 2006

The Beauty of Competition :-)

a much overdue post on some observations i made in Accra

by the very first day i was inundated with adverts on the radio from all the cellular service providers
Scancom Ghana: areeba ( spacefon, then spacefon-areeba and now areebaa) : buy a sim card and get one free, plus the chance to be entered into a draw to win a mercedes, plus 2 free areeba t-shirts
Millicom Ghana :buzz : get buzz, because we're the only ones with buzz crbt ( caller ring back tone) and your friends can hear all these wonderful songs when they call you etc.
Ghana Telecom: one-touch: get one-touch ecause we have one-touch family and friends, where you can call your 4 (?) favourite people for 40% less.
Kasapa Telecom: kasapa: get kasapa because calls are free after 11pm and on weekends

some of the networks were advertising features that other networks already have or were also introducing, but each was trying to push theirs out as unique, and the best buy. i was amazed everytime i heard the ads. was i really in accra? 13 years ago, Millicom Ghana Ltd. pioneered Mobitel as the first cellular service provider, and that was followed by kasapa ( then celltel). 9 short years ago Scancom introduced areeba ( then spacefon) and quickly picked up a lot of customers since they had GSM whereas mobitel had pioneered an analog service. spacefon soon became the dominant service provider, and their sim cards and pre-paid units were extremely highly priced, but seeing as they had very little competition, they could afford to do that.

today the landscape is completely different. although areeba has the broadest coverage nationwide, and by far the largest subscriber base, one-touch and buzz now offer services to rival it, and are picking up quite a few cutomers with their more reasonably priced pre-paid units. also quite frankly, areeba used to be the network of choice also because it was considered 'cool'. not so and one-touch have upped their 'coolness factor' and are competing hard.

kasapa is a different story. they are pioneering CDMA technology in ghana, and have managed to offer a fully connected handset for about 100,000 cedis ( a little over 10 dollars). in accra in december, there were quese daily outside the kasapa offices to get phones. there were police officers at the offices to control the crowds - it was that bad.

it has been really exciting to see how the competition has forced the different service providers to improve their performance, and find a basis to compete. they all sold sim cards for unreasonable prices in the beginning, but now all the rates have been slashed incredibly. who would have ever thought that you could get a 'starter pack' (sim card and a few units, with instructions etc.) for 20,000 cedis (a little over $2, buzz promotional rate in december)

granted, there is still some work to be done on the quality of service itself, particularly in relation to calls between areeba and one-touch. when i first to accra i thought my phone wasn't working, due to the number of times i got the message 'call not allowed!' but i realized later that was the usual process for making a call from an areeba user to a one-touch user. both companies claim they are not doing anything intentional, but the interconnection is terrible. this is while there is an ongoing feud between the two on interconnection rates (money paid by ghana telecom to scancom for calls originating on the one touch network and terminating on the areeba network and vice versa). one wonders whether it is really no fault of the providers. hopefully 2006 sees the National Communications authority mandating that something be done about this.

Tags: ghana, areeba, one-touch, kasapa


nii adom said...
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nii adom said...

Wow 20,000 cedis for a starter pack. Kinda hard to believe.

Now if only they would see the light and start competing via quality of service instead of price. I think quality of service would be more attractive to investors than price.

My engineering side worries about how well the network is going to scale.

Oluniyi David Ajao said...

Good article, well researched.

I also blogged about Kasapa recently, ad write regularly for the online publication "Mobile Africa".

My only beef with Kasapa is that they are not offering internet access, which is very possible with the CDMA technology they are currently using.