Plans to curtail MTN’s dominance bad for investment – Sam George … urges telco to petition

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George Samuel Nartey, a member of the Parliamentary Committee on Communications

A member of Parliament’s Committee on Communications, George Samuel Nartey, has described as unfortunate the decision by the Ministry of Communications to direct the National Communication Authority (NCA) to enforce the provisions of the Electronic Communications (EC) Act 2008 and National Telecommunications Policy (NTP) to address MTN’s dominance in market and revenue share of the sector.

After the directive, the NCA issued a statement saying: “The National Communications Authority (NCA) in the exercise of its mandate under Section 20 (13) of the Electronic Communications Act, 2008, (Act 775) hereby declares its intention to classify MTN as a Dominant/Significant Market Power.” This means that measure would be rolled out soon to correct the dominance of MTN and ensure some balance of market and revenue share among all players in the sector.

According to the Member of Parliament for Ningo Prampram, the policy decision has sent a bad signal to investors who may be interested in the economy because of the free market regulations of the state. He believes the action amounts to the use of regulatory bodies to curtail the benefits of investing. He therefore advised MTN to petition the Parliamentary Committee on Communication for redress if the company feels the move is untoward.

“Today when you say MTN or Scancom has an unfair advantage, you need to remember that MTN was not the first to come into the market. There was Milicom which is today AirtelTigo, they were the first, Ghana Telecom which is today Vodafone was also there.

How come Scancom has become a dominant player or a significant market player as the law will designate them? It is simple, at a time other investors did not see Ghana as a favorable investment destination, they took a gamble, they took a risk and invested billions of dollars into rolling out their infrastructure.

At the time, Milicom and Ghana Telecom where all being conservative in their investments in Ghana. So, if an investor chooses to believe in the Ghanaian market and the potential in the market and that investor rolls out a plan and invest billions into the economy and tomorrow just by a ministerial fiat you want to roll back their investment, an investor would subsequently think about investing in any other sector in Ghana,” Mr. Nartey told the B&FT in an interview.

He added that apart from the huge investment MTN made into voice, the company was the first to sacrifice US$67.5 million to acquire the 4G spectrum which ushered the nation into the data driven economy in 2015.

“The market was first driven by voice and MTN made significant investments there and became the market leader. When a second window was opened for players in the sector to acquire the 4G license and gain a major share of the market which is today driven by data, the smaller players could not convince investors and raise money to acquire the spectrum.

That is why today they are benefiting as the biggest when it comes to voice and data. So why are we in a way trying to reward those who did not believe in the market. I think is a wrong decision,” Mr. Nartey said.

Selorm Adadevoh, CEO, MTN Ghana

A statement from MTN noted that it respects the NCA’s purview to regulate the telecommunication sector in Ghana based on legislation and best practices. However, it has not yet received the formal notification from the regulator and awaits this to assess the details. “Until then, MTN Ghana will refrain from making any public statements or comments on this matter” it said.

While assuring its customers and shareholders on its commitment to the delivery of a bold new digital world in Ghana the statement stressed that MTN is a responsible market leader in a highly competitive market.

“We remain an ethical business committed to its regulatory obligations while striving to deliver on its belief that everyone deserves the benefits of a modern connected life. MTN Ghana is focused on providing the enabling technology to support Ghana’s digital economy and drive productivity, particularly during the COVID-19 pandemic.”

But in a press statement, the Ministry of Communications is confident that the move is in the best interest of the state and its citizens. “This policy directive is motivated by evidence of a growing market imbalance and creation of a near monopoly in the telecom sector. This imbalance potentially exposes the country to the dictates of the dominant operator and negatively impacts on competition and choice for the consumer as well as investments within the sector.

The policy is therefore aimed at ensuring proper and healthy competition among telecommunications players, secure a much better pricing policy for the consumers and facilitate a sound regulatory regime,” the statement added.

Industry statistics released from the Statistical Bulletin – Quarter 4, 2019 of the National Communications Authority (NCA) indicate that MTN has almost 75% of telecommunications market share. A review of these reports have shown that, this has been the trend over a three-year period.

This trend has continued into the first quarter of 2020 as well. These statistics, while impressive and showing growth within the telecommunications and financial sectors clearly shows an uncompetitive and unprofitable environment for less dominant players in these industries, the statement added.

When contacted by the paper, CEO of the Ghana Telecommunication Chamber, Ken Ashigbe said: “This is the minister’s directive to the regulator and it borders on pricing; as a chamber we don’t discuss that. We don’t talk about the issues of pricing and all of that. Issues of pricing and competitiveness is one of the cardinal things as chamber we do not talk about; those are things that the members themselves would deal with.”

To the Communications Ministry the move would come with some consumer benefits including the offering of choice to consumers with the stimulation of innovative products and promotions. Consumers, the statement said, would have the power to switch service providers for other experiences and not restrict them to the largest provider.

Minister for Communications, Ursula Owusu-Ekuful

“It would create a catalyst for passive infrastructure sharing within the industry especially for national roaming services and increase service choice for consumers within areas where SMP is present. The dominant operator would not be able to use predatory pricing to eliminate competition. The dominant operator would not be permitted to charge a high price to call, SMS, or transfer money to other services, while keeping its own prices low.”

In addition to the above, customers can rest assured that the NCA will be vigilant against any anticompetitive behaviour by any operator to ensure that the customer is always getting the best quality, the best price, the most innovation, and the opportunity to choose their preferences. The ministry believes, increased competition may bring better quality services, better pricing, and more innovation to the market, for voice, data, video, and value-added services (including mobile financial services).

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