Strong competition makes MTN Ghana spend more – Group CEO

Strong competition in Ghana’s telecommunications industry has compelled the largest mobile network operator, MTN to overspend in 2010.

The company spent over 3 billion South African rand,approximately $450 million for its operations in Ghana.

According to Phuthuma Nhleko, out-going Chief Executive Officer and President of MTN Group, MTN Ghana spent more money in the face of the competition and this has resulted in a trend bucking on its capital expenditure for the year 2010.

“Ghana is really the operation that has bucked the trend on capital expenditure. It is very much as a result of the huge competition in Ghana”, Mr Nhleko told the press in South Africa on March 9, 2011 when he presented the company’s financial results for the year 2010.

“We’ve got five competitors and very strong competitors. We’ve got Vodafone, Millicom, Bharti and Glo to enter the market fairly soon. So we have had to ensure that as we did in Nigeria we’ve got sufficient capacity and coverage at a fairly acceptable level”, he added.

We have been able to maintain market share by and large.

According to the National Communications Authority’s market share data of all the mobile phone operators as at December 2010, some phone companies gained and others lost with marginal per cent.

MTN started the 2010 year with a market share of 50.27% and ended the year with 49.23%, Tigo had 21.26% at the beginning of 2010 but up 22.58% at the end of 2010.

Vodafone had 17.12% at January 2010 and it dropped 15.37% at December 2010.

Zain now Airtel had 8.07% at January 2010 and that rose to 9.90% at December 2010.

Kasapa now Expresso had 1.52% and 1.35% in January and December 2010 respectively.

The rest of the market share which was less than 2% was for fixed lines from Vodafone.

And even though MTN Ghana’s market share dropped, it still maintains the majority share in a five player market. The MTN boss agreed that it was quite a sterling effort.

“Yes, we dropped from 55% to 53%, but I’m sure you will agree that in a five player market that was quite a sterling effort.”

Mr Nhleko says competitive products like MTN Zone and MobileMoney has allowed the company to optimize its capacity for the majority market share.

By Ekow Quandzie

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