The effect of price war on the usage of telecommunication services in Nigeria - Admission/Application Essay Example

Over the years, an influx of new telecommunication services providers has been observed. Some of the players in the industry include Globacom, Airtel, MTN among many other that exist. The study investigates the conduct of players in the market and their implications on telecommunication usage in Nigeria (Rilwan, 2013). The Nigerian Communication Commission is charged with the responsibility of ensuring that competition in the telecommunication industry is fair to all players. Price actions of competitors are a key ingredient that is likely to stimulate the development of price wars.

Problem statement for this research is highlighted below: Nigerian telecommunication service providers have been engaged in dragging price wars aiming to woo new customers to cross over to another service provider. A number of pricing strategies have been used by the players in order to attract prospect customers. Some of the competitors have priced their services the same as those of their competitors because prices are relatively well established in the market. Other service providers have been setting low rates with an objective to establishing a large customer base (Antwi, 2011).

Price wars can have severe effects to a service provider because in many situations the prices changes may not have been anticipated. Most of the changes are knee-jerk reactions. Leaders of such organizations take measures that are not well calculated and may end up lowering interest rates to attract numerous clients in the market. The main beneficiaries of such cutthroat competitions are the customers who end up receiving affordable services. However, the quality of services offered risks being compromised.

Price wars in this scenario affect the consumer spending habits (Antwi, 2011). It has been established that price wars have the potential of causing an unstable market due to makeover changes that are done from time to time. The actions of the players in the industry subject other players to