a survey of internet data pricing among mnos in ghana

2014

FAREED IBRAHIM IDDRISU

ALEX AFFO

RAFFCOM RESEARCH

11/21/2014

A survey of internet data pricing Among

MNOs in Ghana

1 | P a g e A s u r v e y o f i n t e r n e t d a t a p r i c i n g a m o n g M N O s i n G h a n a

©RAFFCOM RESEARCH 2014

EXECUTIVE SUMMARY

This research report contains a study of the various pricing plans of five out of the six mobile Network

Operators (MNOs) in the Ghanaian telecommunications market, with the aim of giving the Ghanaian

subscriber an understanding of data usage and a picture of the various pricing plans the MNOs have

on offer. The study is done together with a survey to find out the views of subscribers concerning

various issues such as mobile usage trends, pricing and MNO preference amongst others.

Available public information from the MNOs at the time of the research is what is used for the study.

From the study a comparative analysis of the data plans on offer show a largely similar data pricing

tariff, despite different marketing structures. However little variations amongst the tariffs mean a lot to

consumers as these differences can be crucial in a consumer’s preference for a particular MNO.

We do not intend to point out which MNOs are offering the best tariffs or prices but just to put out what

is available from our research for individual judgement.

A summary of the results of the market survey are also presented in this report. The survey clearly

confirms a preference for data rather than voice usage among subscribers despite the relative small

sample size used in the survey. This however is not different from various reports that confirm the

increasing usage of data rather than voice service.



INTRODUCTION

In Ghana, the mobile telephony market is one of the few industries with fierce competition amongst

players in the sector. There are currently 6 mobile network operators (MNOs) operating mobile

telephony services (i.e. voice and data) in the market.1 This fierce competition to acquire and retain

subscribers across the Ghanaian consumer base, which is estimated to be 29 531 488 and 14 615

048 (voice and data respectively) out of an estimated population of 26 566 2402 has largely

contributed to a healthy rivalry, with the various MNOs adopting innovative means to keep up with

competition.

Global trends in the telecommunications usage show an increasing consumption and preference for

data services (i.e. internet) as opposed to traditional voice and text. Statistics indicate that from 2009

to 2014 revenue from data was up from 13% to 28%. It is also forecasted that between 2013 and

2017 data revenue will grow by US$ 38 billion compared with a decline in voice revenue over the

same period.3

Increase in data service over voice is attributed to the growing use in smartphone and notebooks (i.e

tablets and ipads) as well as the many value added services such as Apps that demand the use of

data. Interestingly calls over the internet (VoIP) which is increasingly becoming popular, demand data

rather than voice consumption.

The story generally is not different within the Ghanaian context according to the industry regulator the

National Communications Authority (NCA), mobile data penetration has grown from 12,405,907

(47.36%) in January 2014 to 14,615,048 ( 55.01%) in August 2014, an increase in 7.74% just over a 7

month period, and an average monthly growth of 6.39%. At this rate we forecast that this growth can

reach as high as 75% by close of year 2015.

This gradual changing trend in consumer demand for data (i.e fixed and mobile) in Ghana is still

provided largely by MNOs as opposed to ISPs a sector largely under-developed in Ghana.

In order to stay ahead of competition MNOs are hoping to attract subscribers through many innovative

ways. One of this is through pricing of various capped (bundle) and unlimited data.

This research therefore surveys the various data pricing plans of the MNOs, and does a comparative

analysis of these prices, together with responses from a conducted consumer survey related to the

subject.

1 AIRTEL MILLICOM(TIGO)

EXPRESSO SCANCOM(MTN) GLOBACOM(GLO) VODAFONE 2 National Communications Authority Ghana data

3 Vodafone group report 2014



Figure 1.A rising mobile data penetration trend

MOBILE DATA MARKET IN GHANA

The number of subscribers using mobile data services as of August 2014 was 14 615 048, out of an

estimated population of 26 566 240. This means that more than half of Ghana’s population i.e. 55% is

using data services as compared to the stated 29 531 488 using voice. It should be noted that the

figure quoted for voice is higher than the estimated population due to the practice of subscribers

subscribing to more than one MNO at the same time.

The growing demand for the consumption of data means that MNOs that are able to provide reliable

broadband (Mobile) at a competitive price will likely enjoy a larger market share. As at August 2014

figures by the regulator indicates that MTN enjoys more than half of the total data market share with

53.12% and the lowest being Expresso with only 0.25% market share.

The chart below indicates the share of the data market, with MTN leading and Expresso lagging.

Interestingly Airtel, Tigo and Vodafone all sharing just above 14% with Globacom the youngest player

(started operations in 2012) posting a share of 4%.

47.36 48.84 49.39

54.09

50.85

52.77

55.71 55.01

42

44

46

48

50

52

54

56

58

January Febuary March April May June July August

Mobile Data growth 2014



Figure 2 MNO data market share August 2014. Data source NCA

DATA PRICING AMONG MNOs

One of the several benefits of competition in the Ghanaian mobile telephony market is the seemingly

decline in prices of services such as calls, SMS, IDD and data bundle prices. However there is still a

feeling amongst many subscribers that they hardly get value for money and that most of the

advertised services come with hidden cost. All MNOs provide only mobile broadband except for

Vodafone that provides both fixed and mobile broadband services. However it is the view of

RAFFCOM RESEARCH that the monopoly enjoyed by Vodafone in the fixed broadband market has

resulted in a largely uncompetitive sector and a general lack of infrastructure to provide fixed line

broadband services to many subscribers. This means that a large segment of consumers who

demand data services has to rely mostly of mobile broadband from the major MNOs and a few ISPs

that provide mobile broadband in the form of modem devices. Our pricing survey is therefore focused

on the mobile broadband sector among the MNOs as we are aware there are a number of ISP

companies that also provide mobile broadband to consumers.

Our survey does not include Expresso network due to our inability to find public information about

their data tariffs.

MEASURING INTERNET DATA

It is important to give a brief understanding to the concept of internet data, and measuring what an

amount of data can be used for. Data is consumed when browsing the internet or applications that

require the use of the internet. Different internet applications require varying amounts of data usage,

14.14% 0.25% 4%

53.12%

14.35%

14.15%

Data market share

Airtel Expresso Globacom MTN Tigo Vodafone



e.g. whiles checking a basic email will require as little as 3000 Bytes(3KB), browsing a standard

webpage will require 600 000 bytes(600KB) and downloading a song will typically consume 5000 000

bytes (5000KB).A unit of data is measured in bytes.(see appendix for unit measurements).There are

no acceptable standards for what exactly an amount of data can do and so the figures we have stated

here may vary in other publications.

Due to the fact that most applications consume thousands or millions of bytes measurements are

typical done in megabytes MB (Millions of bytes). So instead of 5000 000 bytes or 5000KB a much

simpler unit of 5MB is used. A more detailed list of what various amounts of data can be used for is

provided in the appendix.

With a sense of what various amounts of data can do, should be insightful in comparing various tariffs

from the MNOs whiles understand the best deals these MNOs are giving out.

DATA PRICING/TARIFFS OF MNOs.

A study of the available data pricing tariffs indicates a heterogeneous structure amongst the MNOs.

This means that a simple metric comparison cannot be carried out in surveying the pricing but rather

comparing based on similarities such as daily and monthly rates as well as range of data bundles.

e.g the various prices for data in the 5 to 10 GB range. We have therefore segmented the comparison

into 5 data bundle ranges of 10 to 500MB, 500MB to 2GB, 2 to 5GB, 5 to 10 GB and 10GB+.

AIRTEL: Airtel has a segment of prepaid and post-paid bundles as well as a pay as you go (PAYG)

tariff rate of GH₵ 0.10. All post-paid bundles have a validity period of 30days. With the prepaid

divided into 1, 5,10,15, 30, and 90 days. Each validity period has one or more bundle name such as

Month, Mini, Month, Maxi etc.

MTN: Has 3 segments, a PAYG and a pay monthly internet bundle and unlimited. The PAYG is

divided into daily, weekly monthly plans. unlimited offer, social bundle, with a PAYG tariff GH₵

0.10499 per MB). In our opinion MTN caters for a wide range of needs and offers the most flexibility of

pricing.

GLOBACOM: Globacom has segmented its tariffs into Mini, Monthly/Quarterly and other plans. They

have 1,3,7,15,30, and 90 day validity periods. Globacom offers very little in terms of flexibility

TIGO: Tigo has a single plan divided into daily, weekend, weekly and monthly segments. Each

segment is subdivided into lite and xtra for light and heavy users respectively.

VODAFONE: Vodafone anticipates the different browsing needs of consumers and so has divided its

packages into 3 categories; browser streamer and downloader for light, moderate and heavy users.



MNO Validity period(days)

Price GH₵

Data Bundle(MB)

10-500

Airtel 1 1 5 10 15 30

0.50 0.85 1.00 1.50 3.00 5.00

10 20 30 50 100 200

Globacom 1 3 7 15 30 5

1.00 1.50 2.00 3.00 4.00 5.00

50 60 100 200 250 300

MTN 1 1 1 1 7 15 15

0.50 1.00 3.00 5.00 1.00 2.00 5.00

20 50 180 350 25 60 150

Tigo Daily auto renewal Daily auto renewal

0.99 0.99 2.49 2.49

50 100 150 200

Vodafone 1 7 30 30

1.00 3.00 5.00 10.00

30 100 200 400

Table 1 Comparison of data bundles in the 10 to 500MB Range


Price GH₵

Data Bundle(MB) 0.5-2GB

Airtel 30 15.00 30.00

0.75 2.0

Globacom 30 30 30

8.00 15.00 25.00

0.6 1.2 2.0

MTN 15 30

16.00 20.00

0.5 1.0

Tigo weekly 30

8.99 8.99

1.0 0.5

Vodafone 30 15.00 0.75

Table 2 Comparison of data bundles in the 0.5 to 2GB Range




Price GH₵

Data Bundle(MB) 2-5GB

Airtel N/A N/A N/A Globacom 30

40.00 30.00

3.2 3

MTN

30/45*PAYG 60.00

4

Tigo weekly 30

8.99 8.99

1.0 0.5

Vodafone 30 15.00 0.75

Table 3 Comparison of data bundles in the 2 to 5GB Range


Price GH₵

Data Bundle(GB) 5-10

Airtel 30 90

60.00 75.00

5 6

Globacom 30 90

55.00 80.00

6 10

MTN 30/45*PAYG 30/45*PAYG

80.00 120.00

6 10

Tigo 30 30

49.99 59.99

7 9

Vodafone 60 80.00 6

Table 4 Comparison of data bundles in the 5 to 10MB Range


Price GH₵

Data Bundle(MB) 10GB+

Airtel 90 30(postpaid)

150.00 120.00

12 12

Globacom 90 80.00 10 MTN 30

30 30 30 30

120.00 200.00 400.00 600.00 800.00

10 18 32 50 200

Tigo N/A N/A N/A Vodafone N/A N/A N/A

Table 5 Comparison of data bundles in the 10GB+ Range



MARKERT SURVEY RESULTS AND ANALYSIS

As previously stated a survey was conducted using an online questionnaire. The aim was to solicit

various responses to questions related to the subject under discussion.

A summary of the results is given below.

The sample size of the survey was a 100 respondents of that number 72.92% were male and 27.08%

female.

Respondents were from all the regions of Ghana with the highest of 56.64% coming from the Greater

Accra and the lowest of 1.03% from the Brong-Ahafo region.

57.65% of the respondents claim to use the MTN network compared with 50.59% Vodafone, 25.88%

Airtel, 15.29% Tigo, 7.06% Glo and 1.18% Expresso. These results generally do not differ much from

that of the figures from the regulator. A market where often consumers are subscribed to more than

one MNO at any given time, the practice of subscribers having formal agreements with MNOs is rear

or non-existent in the Ghanaian market. This makes it possible for subscribers to belong to as many

MNOs as possible.

One of the key information we sought was to find the preference of use of mobile telephony.

Interestingly as expected 77.27% of respondents said they use data service mostly as compared to

21.59% and 1.14% for making calls and sending SMS respectively.

In terms of the preferential use of the device for browsing the mobile phone was cited as the most

used device with the laptop, tablet/ipad and the desktop in descending order of preference.

The results also indicated that 73.33% claim to consume between 20 to 500MB of data on an average

in a month. This statistics confirms why Airtel and MTN have provided a wide array of tariff options in

this range as opposed higher data bundle ranges greater than 500MB.

48.81% of respondents claimed they had no idea of the pricing of data bundles compared to 33.33%

who claimed they knew while 17.86% said they only knew for their MNO.

In an attempt to find out a rank of user experience of users whiles browsing, more than half that is

53.57% said the felt their data bundle finished quicker than expected. Another 42.88% felt data

bundles were expensive compared with 22.62% and 20.24% saying data bundle was well optimised

for theor needs and data bundle was cheap respectively.

Still with user experience 55.29% of respondents say they didn’t have value for money from their

respective MNOs as compared with 35.295 whiles a further 9.41% indicated they didn’t know.

Finally 85.88% of respondent said they will want the same data tariffs at cheaper price compared with

9.41% saying there were okay with the current data tariffs and price. 5.88% of respondents said the

preferred more data at higher price.



CONCLUSION

This study confirms that like all mobile telephony markets the usage trends is data, which is largely

due to value added services that demand data rather than voice. This steady growth in data usage in

Ghana shows a huge demand by subscribers to access the internet. The demand for the usage of

internet in our daily lives is only set to increase as the internet increasingly becomes a necessity. The

age of the internet of things (IoT) is already with us. It is therefore imperative that Subscriber have a

good understanding of what various MNOs have on offer and just how much they are paying for

internet.

Already some MNOs in order to attract subscribers are providing several marketing offers. Some of

these offers include free access to social media applications such as facebook, WhatsApp, twitter,

Wikipedia etc. These offers allow the user to use their data for other applications whiles making

savings on these free offers. The fierce competition for subscribers is making prices much more

affordable and this is to the benefit of subscribers.

Aside pricing of data it is important to consider the internet speeds MNOs are providing. All MNOs in

Ghana are operating on at least 3G networks. With Aritel claiming to be on 3.7G network.

It is worthy of note that there are new entrants into the mobile data market. Surfline a Ghanaian

telecommunications company is the latest to join in the market and the only service provider with a 4G

network. It is expected that with Surfline’s superior technology in the form of 4G will push the

traditional telcos in speeding up the acquisition and deployment of their own 4G network. Also further

competition for price tariffs should results in favourable tariffs for the subscriber.

The fierce competition amongst MNOs should ultimately be to the advantage of the subscriber, as it is

certain that this competition will continue for years to come.



ABOUT AUTHORS

Fareed Ibrahim Iddrisu (Research Analyst): is the lead researcher at RAFFCOM

RESEARCH. He Holds an MSc in Business Intelligence and Analytics from the University of

Westminster UK and a BSc in Telecommunications Engineering from the Ghana Technology

University College. Fareed has a keen interest in telecommunications, ICT and broadcasting

technology.

Alex Affo (Telecommunications engineer and Researcher): is a researcher at

RAFFCOM RESEARCH. He holds a BSc in Telecommunications Engineering from the

Ghana Technology University College. Alex has a keen interest in electronics, emerging

technologies in ICT and telecommunications and Digital economy.

Published by RAFFCOM RESEARCH • Accra Ghana • mobile +233207293738/+233 • Fax: +44 (0)20 7395 9001 • Email: [email protected]• Registered in Ghana © RAFFCOM RESEARCH Limited 2014 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior written permission of the publisher. Figures and projections contained in this document are based on publicly available information only and are produced independently of any client-

specific work. The opinions expressed are those of the stated authors only.



APPENDIX

Data Measurement Chart Measurement Chart

Data Measurement Size Bit Single binary Digit (1 or 0) Byte 8 bits Kilobyte (KB) 1,024 Bytes Megabyte (MB) 1,024 Kilobytes Gigabyte (GB) 1,024 Megabytes Terabyte (TB) 1,024 Gigabytes Petabyte (PB) 1,024 Terabytes Exabyte (EB) 1,024 Petabytes

Table 6 Table showing a measurement chart

MEASURING DATA USAGE

Source: www.citizensutilityboard.org

1MB of data will:

Send or receive 50 e-mails(without attachment)

Stream 2 mins of music

View 1 web page

Post 3 photos to your facebook page

Watching 30 seconds of video on youtube or other video

sharing sites.

1000MB/1GB of data will:

Send or receive 50,000 e-mails(without attachment)

Streaming 33 hours of music

View 1000 web pages

Post 2.800 photos to your facebook page

Watching 8 hours of video on youtube or other video sharing sites.

a survey of internet data pricing among mnos in ghana

Documents

data services

data plans

data revenue

n o s i n g h

use of data

demand data

p r i c i n g

increasing usage of