The provision of fourth generation (4G) mobile data services has become the latest battleground in Ghana’s fiercely competitive mobile telecommunications industry. Following the entry of Vodafone Ghana into the market a fortnight ago, representing the first major challenge to the market leadership position of MTN Ghana, the latter has immediately responded by launching what it calls its 4G + service.
While MTN claims that its new upgraded 4G service is simply an effort to deploy superior technology for its customers, leveraging on a particular advantage that has emerged, the timing of the launch of the new service suggests that it is a key strategy aiming at defending its industry leading market share in that segment of the mobile data market.
The 4G+ is an enhanced version of 4G which uses a technology known as “carrier aggregation” to enable considerably faster data downloads than the normal 4G. This requires combining the capacity of two different bandwidths and MTN Ghana has been able to do this by combining the 800 megahertz spectrum allocated it directly by the National Communications Authority (NCA) in 2015 with the 2600 megahertz spectrum which it acquired from GoldKey, an indigenous, licensed 4G operator last year for an undisclosed sum.
Carrier aggregation now allows MTN to offer its customers faster data downloads by combining the capacities of the two spectrums. Vodafone, like the two pioneering, indigenously owned 4G service providers, Surfline and Blue, as well as Busy, are using only one spectrum each, these being the ones allocated them by the NCA as at the time of licensing.
Instructively, despite the large amount MTN has invested in deploying its 4G service – including the cost of acquiring a second spectrum, the cost of upgrading the network hardware and the cost of rolling out 600 sites out of the 900 planned – it is not charging its customers any extra tariff, as it seeks to retain its commanding share by offering faster service at the same price.
However, it is having to play catch up with regards to the reach of its new upgraded service since the economics of 4G network rollout demands that this is only done in phases, rolling out in places where there are sufficient customers with 4G enabling devices to justify the cost of upgrading to 4G+.
As at now MTN has coverage in all 10 (original) regional capitals and several other urban and semi urban areas, but everywhere else, Vodafone can compete on an equal footing with both networks providing standard 4G services. Instructively, the other service providers do not have nearly as wide coverage as MTN and Vodafone and so the race for market leadership remains a two horse one.
For Vodafone to catch up in terms of download speed, it would have to acquire a second spectrum, presumably from one of the licensed indigenous service providers who by now realize that they lack the financial and technological wherewithal to stay competitive.
But even if it does acquire the requisite second spectrum it would still need at least a year to execute the needed network technological upgrade to support 4G+ services. Importantly though it has both the financial and technological prowess to do this, and if MTN’s 4G+ deployment gives it the expected market superiority, Vodafone will follow suit sooner than later.
For now, though, MTN’s 4G+ deployment is giving it the competitive edge needed to fend of the fierce challenge from Vodafone’s own 4G rollout.
By Toma Imirhe