Investigating the Applicability of Dynamic Pricing to Ghana’s Telecom Infrastructure Market
Alexander Osei-Owusu1, Stephen E Armah2
1Alexander Osei-Owusu, Graduate School, Ghana Technology University, Accra, Ghana.
2Stephen E. Armah, Business Administration, Ashesi University College, Brekuso Ghana.
Manuscript received on March 11, 2014. | Revised Manuscript received on March 15, 2014. | Manuscript published on March 25, 2014. | PP:62-70 | Volume-2 Issue-5, March 2014. | Retrieval Number: E0696032514/2014©BEIESP
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© The Authors. Published By: Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Telecom operators in Ghana are likely to face large infrastructure investment needs over the coming decade because of rising demand for mobile phone and other related services due to population pressure and an expanding economy. This raises questions about the traditional model of single ownership of physical telecom infrastructures and network layers. The situation has led to infrastructure sharing (IS) among Ghana’s major telecom infrastructure owners. However, IS has not been very successful as a cost effective solution to the ever increasing need for infrastructure capital. This is probably because current owners of infrastructure typically employ the “fixed” pricing model in implementing IS. This research investigated the applicability of Dynamic Pricing (DP) to Ghana’s Telecom Infrastructure Market. DP involves price discrimination over the time dimension and is likely to be a more useful pricing strategy compared to fixed pricing. The study adopted mainly exploratory and descriptive analysis as well as a combination of qualitative and quantitative data collection approaches. Purposive sampling and simple random techniques were used in selection and administering of questionnaires to employees and subscribers of Telecom infrastructure companies from some selected regions in Ghana. The findings of the research identified challenges facing the current “fixed” pricing model, which include surplus inventory, inability to attract new customers and insecurity. The research also confirmed that the market is made up of a variety of customers. They include customers that buy: at an initial full price, when discounted price is sufficiently low, when price is anticipated to remain the same for the entire period and when prices can be bargained. The study also finds that “dynamic Pricing” can boost revenues and it is also the most likely effective strategy for Ghana’s Telecom Infrastructure market.
Keywords: Dynamic pricing, Infrastructure sharing, fixed pricing, price discrimination, Ghana telecom sector.