MTN scheduled to begin phase-2 of SMP directive today

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MTN scheduled to begin phase-2 of SMP directive today

Ghana’s largest telecommunication company, MTN Ghana, has alerted investors and customers of its scheduled implementation of phase-two of the significant market power (SMP) directive, starting today, November 1, 2021.

According to the company’s nine-month performance report to investors, the second phase will see an extension of the on-net/off-net price differential removal beyond default tariffs to cover promotional offers, which include the network’s free after one subscription; allowing customers to use their available minutes to call all local networks.

The National Communication Authority (NCA) declared MTN Ghana as a significant market power (SMP); subsequently, on August 1, 2021, the telecommunication giant implemented the directive from the NCA on phase-1 of the on-net/off-net price differential removal on default tariffs for voice, data and SMS.

“Including the above remedy, we have implemented all three of the seven SMP remedies defined to date by the regulator. We will update the market on implementation of the remaining four directives as discussions with the NCA progress,” a portion of MTN Ghana’s statement to investors read.

On-net/off-net differentials

The removal of on-net and off-net price differentials means that there should not be any difference in call and SMS rates between an MTN-to-MTN communication and a call/SMS from an MTN number to any number on the other networks.

Often, telcos give cheaper on-net rates via numerous bundles and promotions, so that customers will get more value when communicating with each other on the same network; that way, they are able to compete better against other telcos. But these SMP regulations mean MTN is being asked to stop any of such schemes.

In line with the declaration of MTN Ghana as an SMP, NCA proposed measures to correct imbalances in the telecoms market, which include:

1/ Application of 30 percent Asymmetrical Interconnect rates for two years subject to market response, in favour of the disadvantaged operators – in accordance with the law.

2/ Set floor/ceiling pricing on Voice, Data, SMS and Mobile Money, among others.

3/ Review and approve all pricing by MTN as required by law.

4/ Require MTN not to have differential prices for on-net and off-net transactions.

5/ Ensure various operator vendors are not subject to exclusionary pricing or behaviour.

6/ Ensure that MTN’s access to information does not disadvantage any Value-Added Service of non-SMP operators.

7/ Require MTN to present implementation plans on National Roaming Services within the next 30 days for execution on or before the next 90 days.

 Localisation of Scancom PLC and MobileMoney Limited

The company assured investors that it remains committed to its agreement with government to increase the local shareholdings in Scancom PLC to 25 percent, as well as 30 percent for Mobile Money Limited, as part of Bank of Ghana’s (BoG) licence requirements which were extended to January 15, 2022. 

Outlook

MTN Ghana expects to maintain the business momentum through last-quarter of the year. “We will continue to expand 4G coverage and improve our network to further enhance subscriber growth and customer experience. In addition, we will progress execution of the expense-efficiency programme and our prudent approach to managing costs to deliver on our commitment of margin expansion,” the company said. 

Operations

In the third quarter of 2021, the company maintained momentum from the first half, underpinned by diligent execution of its Ambition 2025 strategy, investment in network and IT systems, and ensuring its people remain a priority in light of continued effects from the COVID-19 pandemic.

“Our performance in the first nine months of the year was characterised by sustained growth in data, MoMo and digital – resulting in service revenue growth of 25.4 percent year-on-year (YoY),” the company said.

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