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How Glo has maintained an edge in telecoms pricing

By on April 19, 2011

The Nigerian telecoms industry, acclaimed as the fastest growing in Africa, has once again, come under global scrutiny on account of recent activities in the sector. The renewed interest in the country’s telephony landscape is occasioned by a price war that has erupted among the four major GSM operators, namely, MTN, Globacom, Airtel and Etisalat.

Unlike a conventional war situation fought with bullets and mortar, tariffs and fancy adverts seem to be the major weapons of the Nigerian GSM battle. This aggressive approach is to increase the market share of the respective operators by acquiring and more importantly, retaining more subscribers on their mobile networks.

The scramble for the addressable market share among the operators is understandable. Nigeria is Africa’s most populous country with a population of over 150 million people. Furthermore, the country has a vibrant oral culture that has subsisted for centuries, which keeps people always talking to family and friends.

It would appear easier for a Nigerian to reach out to a family member or friend to pour out his/her heart rather than resort to other impersonal mediums like writing or journaling as obtained in other climes. And since the world has transformed into a global village with family members scattered all over the globe, the telephone has become a veritable tool for such emotional expressions.

The telephone is also seen as fundamental tool for the realization of individual and organizational aspirations. Arguably, telephone operators have discovered a gold mine in Nigeria and its people, hence the current price war.

The latest onslaught could be said to have begun last August when Etisalat Nigeria introduced a new tariff proposition called Easy Life, which allows customers on the company’s Easy Starter and Easy Cliq packages to make calls at the lower rate of 25kobo per second to anyone on any network in Nigeria.  The tariff review, according to officials of Etisalalt, was predicated on the company’s commitment to bringing value and affordable tariffs to the company’s customers.

A few months down the line, and as part of its strategy to woo customers after rebranding, Airtel was to respond with a promotional offer dubbed as the ‘2Good Offer’. The new package enables its customers to pay 20kobo per second after an initial 60kobo in the first minute, and applies to both to Airtel-to-Airtel calls as well as calls to other networks in Nigeria and the United States.

Additionally, the 2Good Offer gives 20 free SMSes to every customer who makes a recharge of N100 every month.

A few weeks into 2011, however, MTN on its part rolled out three new voice plans for its subscribers, namely, MTN Magic number, MTN Talk-On and MTN Family and Friends, each focussing on the lower ARPU segment of the market.

A careful examination of the offer shows that the MTN magic number is modelled after tariffs in the advanced economies, where a subscriber is given the option to pay a flat rate for an indefinite number of calls per month. In the MTN Nigeria scenario, subscribers pay N250 per month and receive an unlimited amount of monthly call time to one specific MTN number which the subscriber has designated as his/her magic number for that particular month.

MTN Talk-On, on its part, allows the subscriber up to 50% discount on MTN-to-MTN calls only, with the first minute charged at 50kobo per second, thereafter, on net calls are charged at 25kobo per second for the rest of the day. What the subscriber is perhaps not privy to is that he/she is actually paying a daily access fee of N15 in order to make MTN-to-MTN calls at N12 per minute.

In the same vein, Family & Friends allows subscribers to register 4 MTN numbers, I other GSM network number and I United States or Canadian number, the subscribers can then call all these numbers at 20kobo per second.

Another addition to the MTN True Value Offer is the MTN Happy Hour which allows free calls to as many MTN numbers between the hours of 12.30 am and 4.40 am every day, weekends inclusive. However, the service is limited to subscribers on the MTN Paygo and Talk-on plans.

However, in its characteristic manner of jolting the Nigerian telephony market, Globacom on Thursday, March 10 announced the introduction of a new Glo infinito which allows subscribers to pay only 25 kobo per second for calls made to any network in Nigeria.

Unlike other tariffs in the market, the 25 kobo per second charge is a flat rate which applies for all local calls irrespective of which network is being called or time of day or which part of the country the call is originating from.

The new package also allows subscribers to call one Special Number at only 2 kobo per second. Interestingly, no daily or monthly rental is charged to enjoy the very cheap rate. The subscriber, however, has an option of registering 5 Glo numbers which he can call at 18 kobo per second. Again, registration is free and there is no rental charge.

In addition to the amazing tariffs, Glo is also offering up to 20% bonus on recharges made by subscribers. N500 recharge attracts a 10% bonus credit, while N1000 recharge will give the customer 15% bonus air time. On the other hand, N5,000 recharge gives a 20% bonus credit to the customer.

Glo is also offering free night calls from 12 midnight to 5 a.m. Subscribers are expected to have used up to N200 air time in the previous week to qualify to make free night calls for the next 7 days.

The new tariff regime seems to be in alignment with the company’s brand strategy for the 2011 and beyond, and is in sync with the brand’s aspiration to offer maximum value to Nigerians.

Furthermore, the new tariff regime may reposition the brand in many ramifications, including shifting public perception of Glo as a challenger-brand to the transformer and creator of history in the Nigerian telecom industry.

Looking more closely at the different offers and value propositions of the operators, ranging from Etisalat’s  Easy Life to Airtel’s 2Good, from MN’s True Value to Globacom’s Maximum Value, it would appear that interesting times are here  for the Nigerian GSM consumers even as they have risen from being on the receiving end of harsh realities to a new-found position of freedom and kingship.

But with the new Glo offer, the subscriber gets a truthful and easy-to-understand payment plan.  For instance, while the Glo subscriber pays N15 for first minute of call made within and outside the network, other networks charge between N24 and N30 for calls within the network and between N30 and N36 for calls going outside the network.

Pundit have described the latest Glo offer as another revolutionary phase in telecom services and the best value offer in the country.  Glo, on its part has clarified that its unique tariff plan is devoid of any rental payments, hidden charges, and conditions.

An industry watcher who craves anonymity made a comment recently in which he described Glo as the stimulant that has propelled growth in the sector and made Nigeria’s telecom the toast of investors across the world.

Source : Tribune