ORGANIZATIONAL FACTORS AS CORRELATES OF COMPETITIVE ADVANTAGE IN THE NIGERIAN TELECOMMUNICATION INDUSTRY

ABSTRACT
The Global System for Mobile communication (GSM) was introduced in the Nigerian telecommunication industry in 2001 after the industry’s deregulation in 1992. The mobile telephone network which revolutionized the business, social and economic lives of Nigerians also engendered competition in the industry. Competition among the operators enabled them to deploy their organizational factors of stakeholders, knowledge, innovation, culture and technology management to create competitive advantage for the benefit of the telecommunication consumers. However, the industry is challenged by volatility of quality of service and intermittent network failures which have affected the value of its competitive advantage. The study examined organizational factors as correlates of competitive advantage.
The study adopted a survey research design. Target population comprised 584 senior and executive management staff of the selected five mobile network operators. This population size also constituted the sample size for the study, using total enumeration. Data were collected through the use of validated questionnaire. The Cronbach’s Alpha coefficients for the constructs ranged from 0.709 to 0.897. The response rate was 64.49%. Data were analyzed using descriptive and inferential statistics.
Findings revealed that there was positive and significant effect of stakeholders management on competitive advantage in the Nigerian telecommunication industry (Adj R=0.626;
F(1,471)=509.732; p < 0.05). Positive and significant effect of knowledge management on competitive advantage was found in the industry (Adj R= 0.532; F(1, 471)= 346.11; p < 0.05).Positive and significant effect of innovation management on competitive advantage was established in the industry (Adj R= 0.514; F(1, 471)= 322.734; p < 0.05).The effect of organizational culture on competitive advantage was positive and significant in the industry  (Adj R= 0.576; F(1, 471) = 413.575; p < 0.05).There was positive and significant effect of technology management on competitive advantage in the Nigerian telecommunication industry (Adj R= 0.516; F(1, 471) = 323.411; p < 0.05).

The study concluded that the massive revolution in the Nigerian economy by the mobile telephone network was created by the competitive advantage driven by organizational factors. It was recommended that the Nigerian telecommunication industry should emphasise improvement of stakeholders’ values, knowledge, innovation, culture and technology management as models for enhanced quality of service and prevention of network failures.  The industry regulator, Nigerian Communication Commission should enact policies to regulate these organizational factors.

CHAPTER ONE
INTRODUCTION
1.1       Background to the Study
            According to Kazmi (2008), organizational capability factors or capability factors (or simply organizational factors as this thesis has chosen to call them) are the intrinsic abilities or skills of an organization with which it deploys its competencies to overcome its weaknesses so as to exploit the opportunities and confront the threats in its external environment.They are viewed as skills for organizing resources and channelling them to productive uses (Kazmi, 2008;Ekore 2014; Ismail, Rose, Uli & Abdullahi, 2014). On the other hand, organizational factors are the strategic strengths that are developed in various functional units in the organization which are essential for the formulation and implementation of strategies (Kazmi, 2008; Ekore, 2014). Resources, whether tangible or intangible, may remain worthless without the organizational factors to develop them(Ismail et al, 2014). Many strategists argue that organizational factors are the result of the organization’s knowledge base which is defined as the knowledge and skills of its staff (Ismail et al, 2014). Researchers are interested in organizational factors for two reasons. Firstly, they would like to know what competencies exist within the organization to exploit the opportunities and confront the threats in its environment. Secondly, they would like to determine what potentials would be developed in order to exploit opportunities and overcome threats in the future.Organizational factors are numerous and varied. They could be organizational skills, organizational integration, product development, technological capabilities, innovation, organizational culture, stakeholders’ management, knowledge management (Ismail et al, 2014; Prahalad & Hamel, 1990; Stalk,Evans & Shulman,1992).
     Kazmi (2008) also argued that strategic advantages are the results of organizational capabilities/factors.Strategic advantages are the outcome of the activities of the organization in its bid to generate greater economic value for its customers, the reward of which are such financial benefits like profitability, return on investments and non-financial advantages like market share or reputation(Kazmi, 2008; Prahalad & Hamel, 1990).Competitive advantage is the common example of strategic advantage created by companies.A company is said to have competitive advantage if it is able to create more economic values than its competitors in the industry (Akinbola, Adegbuyi & Otokiti, 2014).According to Prahalad and Hamel, (1990), the source of competitive advantage has moved from physical to intangible intellectual and knowledge based resources.
The challenge facing most mobile network firms today is to identify the set of intangible market based capabilities or factors as sources for creating competitive advantage (Akinbola, Adegbuyi & Otokiti, 2014; Akingbade, 2014).  Most of the capabilities available to the firms are heterogenous and numerous but for a resource to have and gain advantage, it must be valuable, rare, inimitable, and non-substitutable (Barney, 1991). It is only when these scarce resources or capabilities are identified and appropriate programme developed to meet the above criteria before an organization can have competitive advantage (Akinbola, Adegbuyi & Otokiti, 2014; Barney, 1991). There are different views about where the sources of competitive advantage are generated from.The two common views are the capabilities based view and the resources based view.
There are two opinions on the capabilities based view.According to Zhang(2008), the first is the core competence opinion postulated by Prahalad and Hamel (1990) and the remaining one is the overall capability opinion given by Stalk,Evans and Shulman (1992). Prahalad and Hamel (1990) cited in Zhang (2011) described core competence as the organization’s retained knowledge, especially the knowledge concerning how to manage the numerous types of producing skills and how to combine the network of technologies, Zhang (2008).They highlighted three criteria to identify corporate core competence as follows; Firstly, it must be able to co-ordinate several products and markets. Secondly, they should guarantee measurable advantages to the final consumers. Thirdly, they must be extremely difficult for competitors to copy (Prahalad & Hamel, 1990). On their part, Stalk, Evans and Shulman (1992) submitted that a successful company should focus on its behaviours especially the organizational actions and business systems as well strategize on improving its activities as a basic strategic goal, Zhang (2008).  By this, they postulated the idea of total capacity as the general skills and experience among the employees of the organization (Zhang, 2011).
          The mobile telecommunication network has a market share of 72% of the global telecommunication industry (GSMA, 2016). Equally, in Africa, the mobile network controls 80% share of the telecommunication market. In Nigeria, the mobile telecommunication network has 99.74% share of the telecommunication industry.In a quest for telecommunication services, the Federal Government of Nigeria promulgated Decree no. 75 of 1992 which deregulated the telecommunication industry and created the Nigerian Communication Commission as the apex regulator of the industry. Before the deregulation of the telecommunication service in 1992, Nigeria had only about 400,000 installed telephone lines and 25,000 analogue mobile lines which translated to 0.4 lines for 100 inhabitants(Ndukwe,2003). Putting it in another way, this amounted to a tele -density of about 250 inhabitants to one telephone line i.e0.45% (Ndukwe, 2003; Hassan, 2011). In January 2001, Nigeria, through the telecommunication regulatory body, Nigerian Communication Commission (NCC),conducted the world acclaimed transparent auction of its digital mobile licenses which were won by three service providers, namely MTN (Nigeria), Econet Wireless (Later Vmobile, later Celtel,later Vodafone, later Zain and now Airtel) and the national carrier, MTEL (a subsidiary of NITEL) at the cost of N285 Million each (Ndukwe, 2003). In the year 2002, the second national carrier, Globacom was granted an operating license while in January 2007, the Emerging Markets Telecommunication Service (EMTS) under the brand name of Etisalat was granted a unified access license (NCC, 2007). In 2009, another unified access license was granted to Smile Communications.In December, 2014, the national carrier license earlier granted to Mtel was acquired by Natcom which they (Natcom) launched as Ntel in April, 2016. From these accounts, there are six GSM service providers in the Nigerian telecommunication industry. They are: MTN, Globacom, Airtel, Etisalat, Smile and Ntel.
         The Global system for mobile communication(GSM, originally called Groupe Special Mobile) is a technology developed by the European Telecomunication Standards Institute (ETSI) to identify the rules or the code for second-generation (2G) digital cellular networks which use the altered version of Time Division Multiple Access (TDMA) deployed in mobile phones.It was first deployed in Finland in July 1991 and is the most popular of the three digital wireless telephony technologies (TDMA, GSM and CDMA), (Abubakar & Bello, 2013).According to Abubakar and Bello (2013), the GSM .technology network is made of three subsystems such as a network switching subsystem (NSS), a base station subsystem (BSS) and the operations support subsystem (OSS).The network describes the technology of the band system of the wireless communication( like GSM,CDMA,WAN).This technology is made of MSC (Mobile Switching Centre) and other connected registers.The base station system is made of  a BSC (Base Station Controller) and many BTSes (Base Transceiver Stations).The operating support system (OSS) coordinates the monitoring and maintenance of the technology of the network. Users (subscribers) deploymobile devices referred as User Equipment (UEs) such as  hand sets to connect with the help of the network.The other connecting system between the subscriber and the network is the BTS which is regulated by the original base station controller through the base station control function (BCF).The BCF is executed as a separate unit or combined in a TRX (Transceiver) as a single entity base station.The BCF supplies an operations and maintenance (O& M) linkage to the network management system (NMS) and coordinates  operational states of TRX as well as software and alarm linkage.
              The mobile telecommunication network since its deployment in Nigeria has increased the teledensity from 0.45% in 1992 to 107.87% in 2015 (NCC,2016). The subscription level also increased from 425,000 lines 1992 to 154,529,780 GSM lines in 2016, which represents 355% increase.  Table 1.1 shows the subscription level for GSM lines in Nigeria from 2002 to 2016
Table 1.1:  Number of Subscribers to GSM technology in Nigeria (2002 -2017)
Years
No of Subscribers
Teledensity
2016
154,529, 780
110.00
2015
151,017,244
107.87
2014
139,143,610
99.39
2013
127,606,629
91.15
2012
113,195,951
80.85
2011
95,886,714
68.49
2010
88,348,026
63.11
2009
74,518,264
53.23
2008
64,296,117
45.93
2007
41,975,275
29.98
2006
33,858,022
24.18
2005
19,519,154
16.27
2004
10,201,728
8.50
2003
4,021,945
3.35
2002
2,271,050
1.89
Source: NCC 2017 Website
            It is to be noted that the teledensity in Table 1 was computed on the basis of a population of 126 Million for Nigeria until 2005 and from 2006, it was computed on a population of 140 million people.The penetration level from December, 2007 is based on active subscribers while from 2002 to 2006, it was based on connected subscribers (NCC, 2016).
The contribution of the telecommunication industry to the Nigerian wealth basket is tremendous.Table1. 2 shows the contribution of the telecommunication industry to the Nigerian Gross Domestic Product (GDP).

Table1.2:The Contribution of the telecommunication industry to the GDP of
Year
Jun.2016
2015
2014
2013
2012
2011
2010
% contribution to GDP

9.80%

8.50

7.60

7.40

7.70

8.60

8.90
Source: 2017 NCC Website.

          The GSM technology controls the Nigerian telecommunication industry. Table 1.3 below shows the market share of each of the three technologies in the Nigerian telecommunication market.
Table  1. 3: Percentage Market share by Technology as at January, 2017

Technology
Mobile GSM
Mobile (CDMA)
Mobile Wireless
Fixed Wired
VOIP
% Market Share
99.74%
0.14%
0.02%
0.08%
0.02%
Source: NCC 2017 Website

Table 1. 4a : Shows the market share of each of the four major GSM service providers.
The Market Share by Operator as at January 2017
Operator
MTN
Globacom
Airtel
Etisalat
Subscribers(no)
61,840,461
37,357,843
34,116,409
20, 809,889
Market Share
40.12%
24.27%
22.14%
13.50%
Source: NCC 2017 Website
Table 1.4b: Shows the market share of each of the four major GSM service providers.
The Market share by operator as at October, 2016
Operator
MTN
Globacom
Airtel
Etisalat
Subscribers (No)
60,982,487
37,117,992
32,775,916
22,210,315
Market Share(%)
39.84%
24.25%
21.41%
14.50%
Source: NCC 2017 Website.

The above scenario clearly shows the huge impact the Global System for Mobile communication (GSM) technology exerts on the lives, businesses, creation of wealth and the general economy of Nigerians and Nigeria. As at July, 2016, the total investment in the telecommunication industry in Nigeria was about $68Billion. Of this amount, about $35Billion came from the foreign direct investment (NCC, 2017 Website).The mobile service providers have created a lot of economic and social values for Nigerians (Hassan,2013).The six service providers have deployed their core competencies to create competitive advantage in the market to the advantage and benefit of consumers (Akinbola, Adegbuyi & Otokiti, 2014). Despite the laudable achievements of competitive advantage created by the six network providers in the Nigerian telecommunication industry, one recurring problem since the introduction of the mobile telecommunication is the issue of poor quality of service and network failures.
The motivation for this study lies in the long standing disequilibrium or mismatch between the quality of service and the creation of competitive advantage in the Nigerian telecommunication industry which has resulted in lingering issues of volatility in quality of service and network failures.While the regulators and policy makers have made efforts which have not yielded the desired results in improving the quality of service, yet the issue of improving the competitive advantage created by industry players has remained largely overlooked.It is true that the industry regulators, Nigerian Communication Commission has continued to impose penalties on the operators for delivering poor quality of service, little seems to have done to explore the  myriad of issues that affect the quality of service.Previous studies have established a correlation between the creation of competitive advantage and the quality of service (Stonehouse,Hamill, Campbell & Purdett, 2004).
In the search for the good quality of service and elimination of network failures, it became necessary to investigate those factors that affect and improve the competitive advantage of network operators in the Nigerian telecommunication.Theanalysis of summary table of literature (STOL)on the generation of competitive advantage in the telecommunication industry undertaken by this researcher shows a general gap in literature.Specifically, the STOL also shows a specific gap in the literature in the area of sources of competitive advantage which are potential resources or capabilities in the firms which result in the creation of competitive advantage.From the information available to this researcher,there is paucity of prior studies that have examined the creation of ccompetitive advantage and its sources in the Nigerian telecommunication industry.This is despite a consensus among researchers that the creation of competitive advantage is the surest means to surpass the competition and satisfy consumers (Oghojafor,2012;Porter,1985;Barney, 1991).
In the light of the foregoing, it became very important to conduct a study on the creation of competitive advantage in the Nigerian Telecommunication industry with a focus on those sources that have probablyadvanced the creation of value for the consumers in the industry. According to Wu (2010), the concept of competitive adavantage cannot be analysed without the three basic aspects of the subject namely, the source of competitive advantage, the factors that maintain a competitive advantage and the subject of allocating benefits created by competitive advantage.A detailed study of the literature on competitive advantage suggested a gap in the sources of competitive advantage in the telecommunication industry in Nigeria. Whereas there was a rich body of knowledge in the literature on competitive advantage in most advanced and emerging countries, there were only a few research works in this area in Nigeria, (Hassan, 2011,Oyedijo, 2012). The few available literature on this subject concentrated on some aspects of sources of competitive advantage without linking them with competitive advantage in the telecommunication industry (Akinbola, AdegbuyiandOtokiti, 2014; Itanyi and Ukpere, 2014; Olughor,2014;Suraji &Ajiferuke, 2013;Emerah,Oyedele and David,2013; Oyatoye, Adebiyi & Ameole, 2013; Akpotu, Ikechukuwu and Tamunosiki Amadi,2013; Eromafuru,2013; Ogbo, Itanyi and Ukpere,2012;Osemene, 2012; Babatunde, 2013).This study was undertaken to close the gap.  This wasto the best knowledge of the researcher presumablythe first attempt to undertake a comprehensive study which examined five sources of competitive advantage (Stakeholders’,Knowledge, Innovation, Culture and Technology management) on this industry. This study used Lagos State as study area. It contributed to knowledge in the identification of the sources of competitive advantage in the telecommunication industry in Nigeria.

1.2  Statement of the Problem
There is a problem of lack of identification and recognition of the competitive advantages created by GSM technology andthe six mobile network service providers in the Nigerian mobile telecommunication industry. According to Prahalad and Hamel, (1990), the source of competitive advantage has moved from physical to intangible intellectual and knowledge based resources.The challenge facing most mobile network firms today is to identify the set of intangible market based capabilities as sources for creating competitive advantage.Most of the capabilities available to the firms are heterogenous and numerous but for a resource to have and gain advantage, it must be valuable, rare, inimitable, and non-substitutable (Barney, 1991). It is only when these scarce resources or capabilities are identified and appropriate programme developed to meet the above criteria before an organization can have competitive advantage (Akinbola, Adegbuyi & Otokiti, 2014; Barney, 1991).

Despite the successes achieved since the hosting of the Global System for Mobile communication in Nigeria in 2001, there have been challenges of poor quality of service delivery, network failures, network congestion, unfair competition and infrastructure failures which have worked against excellent service delivery and the realization of greater creation of value and its multiplier effects on the economy(Hassan,2011).These challenges have been used by both the researchers, analysts, consumers and policy makers in the telecommunication industry to underestimate the huge economic and social values created by the service providers.Both commentators and analysts have tended to lay more emphasis on these challenges than the enormous benefits Nigerians have derived from the mobile networks  (Abubakar& Bello,2013).According to Stonehouse, Hamill, Campbell and Purdlet (2004), there is no single measure of competitive advantage but rather there are several indicators that a company has achieved greater performance.Such evidences include improved quality of service,brand loyalty, awareness and customer perception, profitability, price premium, market share and efficiency.Investigating the five potential sources of competitive advantage as this study has done ascertained the critical success factors upon which the industry would build and improve upon to achieve greater quality of service that would reduce if not completely eliminate volatility in quality of service, network failures, inconnectivity challenges and other related operational service challenges......

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