The study sought to explore the use of mobile telephony by firms to advertise goods, products and services. Out of Ghana’s population of twenty-five (25) million, mobile subscriber base of the telecommunication industry reached a peak of fifteen (15) million as at the end of June 2012. Mobile advertising, one of the key advertising tools used by firms in developed economies and parts of Africa has not witnessed active usage in Ghana, except for bulk messaging by political parties and other groups. Most messages sent though useful to consumers are unsolicited generating a lot of public outcry. Firms in Ghana could package their adverts for specific audience. The study therefore sought to assess the prospects and challenges of mobile advertising by firms in Ghana. In order to achieve the objectives of the study, 100 questionnaires for consumers and 70 for firms were administered in Dansoman and its environs. Descriptive statistic was used to analyse the responses and the results presented in tables. Findings indicate that mobile phone users and firms were aware of mobile advertising. The low usage of the facility could be attributed to lack of information of the service/product by mobile network providers. The study also revealed that firms are willing to use the network platforms to reach their clients if the cost of advertising is relative cheaper than the traditional forms of advertising. In conclusion, mobile advertising can be beneficial to consumers and firms if challenges such as cost and product education are improved. The study recommends that telecommunication companies should engage firms and phone users on the benefits of using mobile advertising as an alternative advertising tool.