Effects of Product Innovation on the Success of Telecommunication Companies in Nigeria

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

The telecommunications (telecom) market is a part of the information and communication technology industry. The market is primarily engaged in operating and providing access to facilities for the transmission of voice, data, text and video (Businesswire, 2016). Telecommunication is the transmission of information by various types of technologies over wires, radio, optical or other electromagnetic systems (ITU 2015). It has its origin in the desire of humans to have communication. According to the International Telecommunications Union (ITU), 97 per cent of the world’s population lives within reach of a mobile cellular signal and 93 per cent live within reach of a 3G (or higher) network. In the Americas, the Asia-Pacific region and Europe, over 95 per cent of the population is covered by a 3G or higher mobile broadband network. In the Arab States, the figure stands at 91 per cent; the Commonwealth of Independent States, 88 per cent; and Africa, 79 per cent. Of the 85 countries that provided data on mobile phone ownership, 61 have a higher proportion of men with mobile phones than women (ITU, 2019).

However, competition within the telecommunication industry is getting harder day by day due to globalization, deregulation, increasing global and domestic competition, new technologies, and e-commerce. Firms are competing with each other for customers, market share and long-term survival. Customers are becoming more sophisticated, segmented and demanding, and expect more in terms of customization, newness, quality and price (Stark, 2011). In order to survive in current conditions of market, firms within the industry must enhance their innovation capabilities in order to satisfy market demands and customer preferences to maintain a long-term competitive advantage. Innovation is about creating something new out of nothing. In the modern world of globalization, innovation is of prime importance to any company or organization performing well.

The innovation taking place in the telecommunications industry has triggered certain situations, including massive data-intensive services, applications accessible on the Internet, the use of high-definition multimedia, television services, and the presence of numerous telecommunications technologies. These developments call for an upgrade of the legacy telecommunications systems to the next-generation networks. Product innovation is the development and introduction of a new product to the market or the modification of existing products in terms of function, quality, consistency, or appearance. Hence, because commercial activities in the 21st century are carried out mostly through information and communications technology, like e-banking, e-commerce, e-payment, e-education, e-health, e-agriculture etc. It is pertinent for the telecommunications industry to imbibe product innovations so as to maintain competitive advantage and relevance in the market. Thus, the organizational leadership of telecommunication companies should foster and drive them towards achieving successful product innovation strategies that will make them highly competitive internationally.

1.2 Statement of the Problem

The entrance of other network operators has brought intense competition into the industry. Subsequently, the increasing competitive situation has led to price conflicts over the products and services they provide, ranging from call rates, tariff plans and data rates. Firms have thus needed to employ various innovative and competitive strategies to survive in the industry, and any telecommunications company should be able to keep up with their innovations in order to stay in the game.This innovation means the creation, development and implementation of a new product, process or service with the goal of improving efficiency, effectiveness or competitive advantage.The absence of product innovations in the telecommunication industry can lead to the loss of customer engagement and retention, leading to a loss of market share. While innovations can accelerate their participation in the global economy, greater market share and business growth. Hence, it is upon this premise that this study seeks to examine the effects of product innovation on the success of telecommunication companies in Nigeria.

1.3       Objective of the study

The main focus of this study is to examine the effects of product Innovation on the success of telecommunication companies In Nigeria. Specifically the study seeks:

  1. To examine the impact of innovation on the level of competition in Nigeria’s telecommunications industry.
  2. To assess the influence of management challenges on innovation in the telecoms industry.
  3. To examine the extent at which innovative activities has led to the success and growth of telecommunications industry in Nigeria.

1.4 Research hypotheses

The research is guided by the following hypothesis

HO1Innovation does not give telecommunication companies competitive edge in the global market

HO2: The extent at which product innovative activities has led to the success and growth of MTN telecommunications industry in low.

1.6       Significance of the study

Since this study portrays the effects of product innovation on the success of telecommunication companies, It is therefore critical to note in Nigeria that the findings and theoretical aspects of this work will be relevant to the major players in Nigeria’s telecommunications sector, as well as the Nigerian government.The study will serve as a wake-up call to the telecom sector’s management about the importance of instilling an innovative culture within their organization in order to maintain a competitive edge in the global market.Furthermore, the study will add to the body of knowledge and serve as a reference material for students, researchers, and other individuals who may be interested in conducting research on the topic under study.

1.6       Scope of the study

The scope of this study borders on the effects of product innovation on the success of telecommunication companies in Nigeria. However, the study is limited to MTN walk in centres in Lagos State.

1.7 Limitation of the Study

The limitations of this study include:

Finance: Due to the economic difficulties that people, including the researchers, are experiencing, the prospect of a larger sample size, which would have allowed the study to reach a larger region, has become impossible, so this work is limited to the Nigeria-based MTN Lagos state.

Time: It was not surprising that the researcher was limited by the time frame, as it posed a direct challenge to the effective coverage intended in the course of this report. It is the intention of the researcher to interview all the employees of the selected TELECOM company, but because of the numerous activities of the researcher which border on both academics, work schedules and other social activities, it becomes relatively impossible to explain the intention.

Respondent attitude: The majority of workers do not collect the questionnaires, and those who do collect them pay close attention to filling them out and returning them, while others do not return theirs at all.Others were less accommodating and may have provided untrustworthy information because they were afraid of being exposed, despite the researcher’s promise that all information would be treated with the utmost secrecy and only for education purposes.

1.8 Definition of the term

Innovation: Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services.

Product Innovation: Product innovation is the creation and subsequent introduction of a good or service that is either new, or an improved version of previous goods or services.

Telecommunication: This is the transmission of information by various types of technologies over wires, radio, optical or other electromagnetic systems.

Telecommunication Industry: The telecommunications industry within the sector of information and communication technology is made up of all telecommunications/telephone companies and internet service providers and plays a crucial role in the evolution of mobile communications and the information society.

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