Ghanaian mobile telephony consumers, face high costs as the telecom industry, dominated by MTN, suffers from insufficient investment by other operators.
Historically, companies like Mobitel (later Tigo), Ghana Telecom (now Vodafone), Westel (Zain then Airtel), Kasapa, and Glo, offered voice and data services. Even voice-only providers like Surfline Communications and Busy Ghana struggled to survive, primarily due to a lack of investment compared to MTN, which has evolved from Spacefon to Areeba to MTN.
Public outcry over data costs, has been growing. Samuel Yeboah, known as “Tech In Twi” on Twitter, remarked, “Regardless of the party you support, data prices in this country are expensive, and it is affecting everyone.
@MBawumia, as Vice President, digitalization is part of your policies, and the internet is the backbone of that. All we need is 100GB for 100ghc or less. If you don’t address this, it is going to affect your campaign negatively.”
The telecommunication giant MTN Ghana, responded to growing public concerns about the high cost of internet data, which has been affecting businesses and sparking outrage on social media.
The controversy has led many to call for the dissolution of the National Communications Authority (NCA) board, citing the high data costs and unreliable data supply.
Some attribute these issues to MTN Ghana’s designation as a Significant Market Player (SMP) while others have noted the continuous failure of NCA to let the public know that MTN, was engaged in predatory pricing which had a very negative impact on the industry.
Predatory pricing is a strategy where a company sets its prices extremely low to eliminate competition.
Once competitors are driven out, the company may raise prices to recoup losses. This practice can harm market competition and is often considered anti-competitive and illegal in many jurisdictions.
The Ghana Chamber of Telecommunications, has fixed Tuesday, July 30, 2024, to speak to the matter under the topic “Cost of broadband Internet and Mobile Data”.
Long before the public outcry, the Ministry of Communications and Digitalization at the policy level, reiterated the lack of investment as the cause of the collapse of some of the companies including broadband service providers, such as Surfline which had started its service on a rather promising note.
Sometime in June, this year in an interview with Bernard Avle on the Citi Breakfast Show, Ursula Owusu-Ekuful, while speaking about why the 5G spectrum wouldn’t be auctioned by the Akufo-Addo government, explained that the earlier decision by the Mahama government, gave foreign mobile operators an undue advantage, undermining local broadband operators.
She mentioned ongoing discussions with these operators to explore support measures to ensure their viability.
The minister highlighted that the initial promise of exclusivity to broadband providers was compromised by the subsequent auction.
“It is as if we gave with one hand and took with the other. I have had extensive conversations with them to see how we can support them and it is not just Surfline which exited the market but Blue Broadband was also in there.”
She told Mr Avle that putting up the 4G spectrum for auction began weakening the broadband providers.
“Government sold spectrum to local operators to do broadband on the understanding that they would be given exclusivity in that space, while mobile network operators did voice and procured data services from them [broadband operators] if they wanted to give those data services to their subscribers.
“After promising them exclusivity, we went ahead and auctioned the 4G to these same big players, who MTN then acquired the spectrum because it has so much more financial muscle than these local entities and so MTN cornered the market.”
The Minister also clarified that MTN, one of Ghana’s leading telecommunications companies, has not been excluded from the 5G rollout plans.
On May 30, when the government announced its plans to introduce 5G within the next six months, industry experts expressed concerns about why MTN was not part of the consortium – Next-Gen InfraCo (NGIC) – tasked with implementing the 5G network.
The Minister refuted the claims that MTN was deliberately excluded, calling them a false alarm and far from the truth.
At the operational level, the NCA, has acknowledged public concerns, particularly on social media, regarding high internet data pricing and MTN’s classification as a Significant Market Power (SMP). The NCA reassures consumers that this classification aligns with its mission to ensure fair competition and protect consumer interests within the telecommunications industry.
The NCA clarifies that the SMP classification is not intended to stifle MTN’s operations but to maintain a level playing field in the market.
By implementing measures like asymmetric interconnection rates, tariff parity, and technology neutrality, the NCA aims to foster competition, encourage innovation, and protect consumers’ interests. These measures enable other operators to compete effectively, offer sustainable pricing, and invest in improving service quality.
Supporting its stance, the NCA cited a report by cable.co.uk, reviewed by the Authority, which ranked Ghana 3rd in Africa and 2nd in West Africa for the cheapest mobile internet data pricing. This ranking was part of a regular Billing Monitoring exercise conducted by the NCA.
“The National Communications Authority (NCA) has taken note of some public concerns, especially on social media, regarding high internet data pricing, and the declaration of MTN as a Significant Market Power (SMP). The NCA understands the concerns of consumers.
“As the regulatory authority for the communications sector, the NCA is entrusted with the responsibility of upholding fair competition and safeguarding consumer interests within the telecommunications industry. Therefore, the classification of MTN as an SMP aligns with the NCA’s mission and fulfils its mandate.
“It is important to note that the SMP classification is not intended to punish or stifle MTN’s operations but rather to ensure a level playing field in the market and protect consumer choice.
“By implementing measures such as asymmetric interconnection rates, tariff parity, and technology neutrality, the NCA aims to promote competition, encourage innovation, and protect consumers’ interests. These measures enable other operators to compete effectively, offer sustainable pricing, and invest in improving service quality.
“Furthermore, data from a report published by cable.co.uk, and reviewed by the Authority as part of a regular Billing Monitoring exercise, ranked Ghana 3rd in Africa as the country with the cheapest cost pricing for mobile internet data and 2nd in the West African Region. (The report can be downloaded from this link).
“The NCA wishes to assure consumers that it will continue to work closely with all relevant stakeholders to ensure reliable internet access.
NCA, was established by an Act of Parliament, Act 524 in December 1996, which has been repealed and replaced by the National Communications Authority Act, 2008 (Act 769). The Authority is the statutory body mandated to license and to regulate electronic communication activities and services in the country.
Another document released by the NCA disclosed that the Billing Verification Unit conducted market surveillance on the price of internet data to determine the cost of 1GB of data per month. At the end of the exercise, it was realized that the, average cost of a gigabyte of data per month was GH₵6.3005 ($0.4864); the cost of the cheapest gigabyte of data per month was GH₵1.0781 ($0.0832) and the most expensive gigabyte of data per month available was GH₵16.7731 ($1.2949).
A report on Worldwide Mobile Pricing League published by cable.co.uk ranked Ghana 3rd position in the Sub-Saharan Africa Region as the country with the cheapest cost of 1GB of data per month. Ghana was ranked 2nd in the West African Region. The report indicated that the average cost of a gigabyte of data per month was GHs5.36 ($0.40).
The Billing Unit conducted a similar survey using a similar methodology to obtain the average cost of a gigabyte of data in West Africa to compare results.
The following were considered in the data-gathering process;
All data bundle information (prices and allocation) was obtained from the official websites of the various Mobile Operators in each West African country.
A total of four hundred and ninety-two (492) data plans were collated.
Data plan prices were recorded in their advertised currencies and then converted to the US Dollar using the rates from Google Finance as of 9th April 2024.
The ranking of West African countries according to their tariffs and bundle offers:
Data Extraction: Collection and collation of all bundles from operator websites of all West African countries.
Tariff Conversion: The collected data underwent Tariff Conversion to create a standardized and comparable basis for assessing tariffs across the different countries. Exchange rates from Google Finance were used to convert the tariffs to the United States (US) dollar.
Computation of average bundle tariff per megabyte per country: This is done by summing up all the bundle tariffs for all operators in a country and then dividing it by the total number of bundles considered.
Computation of price per gigabyte. The results from the price per megabyte was then multiplied by 1000 to obtain the price per 1 gigabyte.
Ranking Criteria: Based on the computation, the West African countries were ranked according to their average price per gigabyte, with the lowest average tariff receiving the highest rank.
Ghana has been positioned as the second-ranked country in terms of the lowest average price per gigabyte, according to findings by cable.co.uk.
This contrasts with the latest data compiled by the National Communications Authority (NCA), which positioned Ghana as the third-ranked country in this regard. This disparity can be attributed to variations in the sample sizes utilized and fluctuations in the value of the Ghanaian cedi. Notably, the sample size employed in the NCA’s rankings was three times larger than that used by cable.co.uk.
Similarly, Nigeria was initially identified as the top-ranked country by cable.co.uk. However, upon examination of the collated data, Nigeria’s ranking dropped to sixth place. This discrepancy is attributable to disparities in sample sizes and fluctuations in the value of the Nigerian Naira. Cable.co.uk‘s conversion rate, as of September 2023, stood at 1 Naira = 0.0013. However, since then, the Naira has experienced devaluation, with the current rate at 1 Naira = 0.0008.
While most providers publish internet bundles in data volumes (GB), MTN publishes bundles in Currency Format (GHS).
MTN Ghana data does not expire whilst other Operators offered data have validity periods.
Addressing these concerns during a visit by the Parliamentary Select Committee on Communication, MTN Ghana’s Chief Corporate Services and Sustainability Officer, Adwoa Wiafe cited regulatory measures intended to foster competition amid public interest considerations.
“I believe the NCA has addressed the subject as to why we have some of the data pricing we have. They have also talked about how low our prices are in the sub-region.”
He further explained, “They also talked about the declaration of MTN Ghana as a significant market player which means that our data prices have to be higher than our competitors.
“I think the NCA also explained why we have the data structure the way it is, and that is to improve on competition. Those are some public interest reasons why this is the situation,” Adwoa Wiafe added.
The post Limited investment in Ghana’s telecom industry killing consumers appeared first on The Herald ghana.
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