Business News of 2014-04-01

Shift in focus affecting Tigo’s performance – Chalaby

Tigo’s recent shift in focus in providing financial services is what is accounting for its rather slow penetration in the telecommunication industry.
This is according to telecom analyst Fouad Chalabi.
“Sometimes the focus will be on other income. When mobile money was introduced, Tigo made a lot of noise about it. I think the amount spent in activities with the revenues generated with such activities with mobile money across network is negligible.”
Recent Statistics released from the regulator, the National Communications Authority (NCA) showed Tigo gained only 37,348 new mobile voice subscribers as at January 2014 with a total of 4,058,573 subscribers and 14.28% of market share.
It placed fourth out of the six operators in getting more voice subscribers for the period coming after MTN, Vodafone and Airtel.
It also lost almost 81,000 data subscribers falling by 80,819 to a total 1,496,529 resulting in a reduced market share to 12.06%.
Tigo’s recent strategy focuses on financial services like Tigo Cash and Insurance packages.
According to Fouad Chalabi, they might be gaining some grounds in providing those services, but it is having a significant impact on their subscriber base.
“I think there is a lot of work that needs to be done in this area in order to convince subscribers why I should have money on my phone and where and how I can spend. It is a whole thinking culture thing that we use a lot of cash. Ghana is a cash economy so it will be really hard but it is work in progress. There should be a combined effort in order to do it and this will help operators. For now there is a thin line between running a mobile network and a financial institution. Both parties want to step into each other’s grounds. They are now fighting over the same profile of customers”.