Improving Corporate Performance in the telecommunication Industry with Special Reference to Ghana Telecom Company
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Date
2008-08-23
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Abstract
The study evaluates the performance of Ghana Telecom Company in many respects, notably, various financial criteria, effectiveness (mainly services provided) employee commitment, and corporate social responsibility. In all these areas comparison of the company with others in the industry (Areeba, Buss and Kasapa) is made.
The analysis conducted brought out a number of findings including the following. Competition in the telecommunication industry in Ghana has increased, with every one of the competitors introducing "land line" services which hither to was the sole prerogative of Ghana Telecom. The situation has arisen mainly as because of liberalization of the telecommunication industry in the country. As a result, all four mobile telephone operators are employing various forms of innovative and marketing strategies to stay on top of the competition. The Telecommunication industry is very vibrant and growing at a very fast rate. To sustain this growth, the firms, government as the overall policy maker
and manager of the economy, as well as the regulatory authorities should play their respective roles
more effectively.
Since the mobile/cellular phone is an indispensable tool in the promotion of business and economic activities as well as fostering social interaction, it has become essential in today's economy and very important in nation building. It enhances efficiency and information dissemination in large organizations. For this reason government should more consciously and proactively encourage, in its overall development programmes, widespread use of the mobile/cellular phone.
The findings of the study indicate that telecommunication industry/market faces many challenges. These include poor interconnection between the operators in the country, poor network coverage, concentration of cellular phones in the urban areas, and expensive mobile services. There is also the lack of clear and effective policy on the part of the telecommunication firms to check the misuse of the telecom facilities.
The study shows that, in Ghana, investors are less attracted to operate fixed network due to its massive initial investment and the fact that a relatively long period is required to recoup the investment. Secondly tariff increases within fixed network is highly controlled by government to ensure affordability for the citizenry. This policy puts a heavy responsibility on Ghana Telecom in the form of an additional responsibility for providing necessary infrastructure for affordable internet access to all and sundry.
In spite of government effort at deregulation and providing support to the cellular phone industry, the companies in the industry face a number of problems. Bureaucracy such as difficulties in clearing goods and unduly long licensing process are some factors discouraging investors. To create an enabling environment for investment, government will be required to, as much as possible, remove all
bottlenecks to facilitate and encourage the development of mobile system in Ghana.
Ghana Telecom, the premier telephone company, is also faced with the challenge of maintaining its position in the fast growing market. The company has developed from a pubic sector Department through a public sector corporation to a company. As one of the cornerstones of the new privatization environment in the country, there is the need to critically evaluate its programs and activities as far as the telephone facilities provision is concerned, in the view of its effort at maintaining its leadership position in the telecommunication industry.
However commendable Ghana Telecom's achievements are, the levels of its efficiency and effectiveness in service delivery so far fall below the established standards, even for developing countries. As the study shows, this is reflected in its financial performance. There is therefore a lot more work to be done in enhancing its performance. Although Ghana Telecom has come from a very humble beginning, it has the capability to face competition from the other service providers and maintain its leadership position. For the Company to do so, the study makes the following recommendations. Ghana Telecom must as a matter of urgency expand its network to cover every district of the country; ONETouch coverage must also be extended to cover every district and region in Ghana soon. Finally, the National Communication Authority, the regulatory body, should ensure fair and equal playing field for all telecommunication operators in the country.
Description
A Dissertation Submitted to the Department of Economics in partial fulfillment of the
requirements for the award of Master of Business Administration (MBA) Degree, 2008