Glo, Expresso battle customer attrition

Glo Ghana Limited and Expresso Telecom are battling customer attrition on their networks as the two mobile telephony operators have lost a combined 35 percent of subscribers since beginning of the year in a new report released by the National Communication Authority (NCA).

Glo, which has for the first three months of the year lost over 320,000 subscriptions, now boasts a little above one million lines on its networks, while Expresso at the same time saw its subscriptions go down by more than 14,000 to about 110,000.

The loss of over 335,000 voice subscribers potentially amounts to tens of millions of cedis in lost annual revenue to the two networks, which underpins reports that shareholders of the two networks are exiting the Ghanaian telecom industry after struggling to gain a foothold in the market.

B&FT analysis of the NCA data shows that the speed at which the two networks are losing subscribers is more than it took to acquire them.

Expresso, which acquired Kasapa Telecom in 2010, increased its subscriber base within three months from over 232,000 subscribers in November to 244,674 at the end of January 2011, representing a gain of five percent.

Comparatively, the firm has lost 11.7 percent of its subscriber base within the first three months of this year.

Ironically, Glo -- which paid about US$50million for its operating licence eight years ago and started operation on the last day of April 2012 -- acquired over 468,000 subscribers in May of that year and quickly upped the numbers within three months to about 1.15 million in July.

However, its subscriber numbers after four years in operation is less than it had within the first quarter of starting business in the country.

The loss of Glo and Expresso in keeping subscribers is however a gain for the other four telecom operators, who have all increased their subscriber base for the first quarter of this year.

MTN’s voice subscriber figures for the period was above 17 million, representing an increase of 4.2 percent at the start of this year and culminating in a current market share of 47 percent.

Vodafone also increased its subscriber numbers by 3.8 percent to a little over 7.9 million at the end of March this year, representing a market share of 21.86 percent.

Tigo and Airtel both also gained 4.4 percent and 4.5 percent correspondingly in subscriber numbers to over 5 million apiece, controlling a market share of 14 percent and 13.87 percent respectively.

However, reasons for the defections from Glo and Expresso are not yet clear -- especially as findings from a survey commissioned by the NCA in 2013 indicated that Expresso is the preferred mobile network of choice for the affluent, with fewer of its customers below the national poverty line, followed by Glo -- with the two struggling networks also emerging as the best in quality of service provision.

Ironically, the year-long survey found that MTN and Vodafone customers were ranked as the least affluent users with average wealth, which means that the two biggest network operators – MTN and Vodafone -- have relatively higher proportions of their respective customers considered poor.

The survey findings - reached after a 13,119 sample population was interviewed across the country - has given the network company bragging rights of having the wealthiest mobile phone customers.

Based on the survey, most of Expresso’s customers are old, with about 70% of its customer base above 30 years - highest than all the other five network operators.

Indeed, it is the only network operator in the country that has about 16% of its customers above 60 years -- the mandatory retirement age of workers. The network that comes closest to having more 60-year olds is tiGO, which has 5.2% of those in its customer base.

Additionally, more than one-fifth of Expresso’s customers (22%) are between the age of 46 and 59 years, once again higher than the other operators.

In fact, only about 30% of the company’s customers are below age 30 -- the lowest percentage among all the operators.

The aging subscriber population of Expresso means that its customers, relatively, have more disposable income to spend.