Price Wars and Revenue Performance in African Telecom Markets: Evidence from Zambia
DOI:
https://doi.org/10.59413/ajocs/v7.i3.37Keywords:
Price Wars, Revenue Performance, Market Share, Telecommunications, Strategic CompetitionAbstract
This study examines the effect of price-war practices on firm revenue performance in Zambia’s telecommunications sector, with a focus on MTN and Airtel. Drawing on Bertrand competition theory and strategic competition theory, the study investigates whether aggressive pricing strategies directly enhance revenue or operate through intermediary market dynamics. A positivist research philosophy and explanatory research design were adopted. Primary data were collected from 250 employees using structured questionnaires, while secondary data were obtained from company annual reports and regulatory publications covering the period 2020–2024. Quantitative analysis was conducted using correlation and regression techniques. The findings reveal that price-war practices are strongly associated with improved market share performance (r = 0.705, p < 0.01), while market share performance significantly predicts revenue outcomes (β = 0.693, p < 0.001). However, price-war practices do not have a statistically significant direct effect on revenue performance (β = 0.009, p = 0.887). These results indicate that the relationship between price wars and revenue is indirect, operating through market share expansion. The study contributes to the literature by providing firm-level evidence from a developing economy and demonstrating the mediating role of market share in the price–revenue relationship. It highlights the strategic trade-off between competitive pricing and revenue optimisation in telecommunications markets.
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