Vodafone Ghana Chief Executive Officer (CEO) Patricia Obo-Nai

Vodafone welcomes NCA move to address ‘near monopoly’ in telcos sector

On September 22, 2020, 4:47 PM

Vodafone Ghana Chief Executive Officer (CEO) Patricia Obo-Nai has said the company is not opposed to moves by the regulator to address ‘glaring disparities’.

Speaking to Bloomberg Surveillance, she said “we are very open to the decision.”

This follows the National Communications Authority (NCA) notice to MTN Ghana that it is moving to loosen its ‘near monopoly’ of the telecommunication sector.

With 23.9 million voice subscriptions, MTN Ghana controls 57% of the subscriber market share in Ghana, far ahead of Vodafone, AirtelTigo, and Glo at 21.97%, 20.3%, and 1.75% respectively, a 2019 NCA report indicated.

Additionally, statistics from the NCA further pointed out that MTN’s share in mobile data subscriptions accounted for almost 70% of the market from January to March, 2020.

Ms. Obo-Nai, who leads the second biggest telco in Ghana, stressed that all Mobile Network Operators (MNOs) should have a fair chance in their operations devoid of unhealthy competition.

Ms Obo-Nai stated that Ghana’s law makes provision for the regulator “to ensure a level playing field for all operators in the country”.

“We don’t have any major objections as long as they are actions that has been taken by the regulator is helping the consumer [and] stimulating innovation,” she said.

Ministry moves to tackle the dominance

The Ministry of Communications on June 9, 2020, announced that the telecommunication industry was facing “glaring disparities” and “imbalances” which it said was unhealthy for competition.

According to a statement signed by the Minister of Communications, Ursula Owusu-Ekuful, new policies that were being introduced were meant to correct the imbalance in the market.

Pursuant to Section 20 (10) of the Electronic Communications Act, 2008 (Act 775), the National Communication Authority (NCA) classified MTN as a Significant Market Power (SMP), after the regulator had determined that the mobile network operator controlled more than 57 per cent share of the voice market, as well as more than 67 per cent of the data market.

The statement indicated that the NCA would, among others, apply the measures, including asymmetrical interconnect rate in favour of the disadvantaged operators, in the exercise of its regulatory mandate.

The NCA said it would also set floor pricing on all minutes, data, SMS and Mobile Money, and review and approve all pricing by the SMP as required by law.

Unenthused about the move, MTN dragged the NCA to court over attempts by the regulator to break up the near-monopoly of the company.

In a statement, MTN said despite consultations with NCA, the company was left with no choice than to resort to the court to seek redress.

MTN described the government’s move as “unfair” and said the decision to go to court, was a “difficult” move.

The court’s judgment

The Commercial Division of the High Court on September 1, this year, dismissed MTN’s request to secure a court order to quash its classification as an SMP.

In its ruling, the court held that the evidence before it, including what was presented by MTN, proved that the company was made aware of the process that led to the NCA classifying it as a significant market player.

Court documents proved MTN was informed as far back as 2014.

The court maintained that MTN was given an opportunity to partake in the process, and it duly wrote a letter on September 12, 2014, to make an input that led to the classification.

Increase in data traffic

With many businesses reeling the adverse impact of the COVID-19, telecommunication companies have witnessed the opposite.

Phone calls and internet use have soared not only in Ghana but across the globe, with government institutions, businesses, educational institutions and the entertainment industry, among others, switching to online platforms for operations.

“We’ve seen data traffic go up by about 50 per cent and so we’ve had to expand capacity to manage it as much as possible,” the Vodafone CEO noted.

MTN was the largest benefactor with data revenue’s contribution to service revenue expanding from 26.3% to 28.4%.

Growth in the number of smartphones on the network also increased by 18.5%, as well as data usage by 85.9% to 256,301 Terabyte.

Mobile Money revenue also grew strongly by 28.0% year-on-year in the year of the 10th anniversary of MoMo in Ghana.

MTN CEO Selorm Adadevoh said the profit after tax of GH¢1.01 billion represented a 33.6% increase year-on-year.