Information reaching TechGH24 indicates that there are ongoing discussions within the corridors of the Ministry of Communications and Digitalization about creating a duopoly in Ghana telecoms industry.
A duopoly means there will be only two key players on the telecoms market – most likely MTN and one other player.
The source indicated that the idea is to have another player that can give the overwhelming market leader, MTN, fair competition, which would go a long way to benefit Ghanaians in terms of quality of service and affordability.
It is not clear how the ministry intends to go about it, but the source, who is an expert industry player, thinks the best way to do it is to merge AirtelTigo and Vodafone, which will create an a sizeable entity with over 40% market share and can compete well with MTN.
Glo has been struggling to survive in the market with a market share hovering around one per cent most of the time.
At the last count, MTN had 57% voice market share and a whopping 68% data market share, while Vodafone held almost 23% voice and 14.5% data, and Airtel Tigo had slightly over 18% voice and little more than 16% data. So together, Vodafone and AirtelTigo would have a comfortable 41% voice and 30.5% data.
For a long time, all the telcos have been complaining of non-profitability due to the market in imbalance in favor of MTN.
In June last year, the MoCD declared MTN as a significant market power (SMP), saying that MTN had for several years controlled more than 75 per cent of voice, data and mobile money markets. Long before then, about 15 years early, MTN had already crossed the 40 per cent market share threshold required for a player to be declared an SMP.
Indeed, it is estimated that currently, about 70 per cent of all calls in Ghana terminate on MTN and that means when telcos do their interconnect reconciliations, every telco pays MTN, but MTN pays no one.
Recently, at the Ghana Information Technology and Telecom Awards (GITTA), the Minister of Communications and Digitalization, Ursula Owusu-Ekuful revealed that, in the third quarter of the year, there were over 1.085 billion mobile money transactions on MTN alone, while Vodafone managed some 120 million plus and AirtelTigo did a little over 68 million.
In effect, MTN controls over 85 per cent of the market, which has its positive implications for the economy and for financial inclusion, but also a grave market imbalance that no government is proud of.
The source suggested that naming MTN SMP was most likely the beginning of a strategy to tame it and create another entity that can give it proper and fair competition.
Government acquisition of AirtelTigo
Indeed, prior to naming MTN SMP, government had acquired AirtelTigo, which is a merger between Airtel and Tigo. Airtel was already 25 owned by the state, and Tigo was a company brought into this country by the sitting president, Nana Addo Dankwa Akufo-Addo and his partner.
Meanwhile, government also has a 30 per cent stake in Vodafone Ghana, but both AirtelTigo and Vodafone have admitted to struggling to survive as they are unable to even make profit after tax, in spite of all the award-winning innovations they put out, particularly Vodafone.
Since, government acquired AirtelTigo for a reported US$1 plus liabilities, expectations have been that it will look for a strategic partner to revive the dying company. But it would appear that the strategy might be to merge AirtelTigo and Vodafone to create a second major force. What will happen to Glo under that circumstance is still not clear.
The source did not say which other steps the ministry is taking towards the duopoly agenda, but so far MTN has announced that it is complying with all the regulatory requirements that came with the SMP declaration.
There are seven requirements, and they include the following:
Implement on-net/off-net parity to ensure the cost of voice and SMS communication from MTN to MTN lines, and from MTN to lines on other networks is the same
- Implement a 30% asymetrical interconnect rate for two years, to ensure that other telcos pay 30% less per call/SMS to MTN when they do interconnect reconciliation.
- Present implementation plans on National Roaming Services within the next 30 days for execution on or before the next 90 days.
- The National Communications Authority (NCA) was to set a floor/ceiling pricing on Voice, Data, SMS, Mobile Money, etc. in relation to MTN,
- Review and approve all pricing by MTN as required by law,
- Ensure various operator vendors are not subject to exclusionary pricing or behavior
- Ensure that MTN’s access to information does not disadvantage any Value Added Service of non-SMP operators.
These are early days yet, but the expert source strongly believes a duopoly is the only way MTN would get fair competition, which will yield some benefits for the Ghanaians.