The government of Ghana plans to shut down Joyfm and tame the biggest telco. company in Ghana ( MTN )? – Manasseh Azure Awuni writes
The euphoria was like a suppressed volcano that could no longer be contained. So it erupted spontaneously. The reason for that indescribable joy was unprecedented in the history of Kete-Krachi – unprecedented as the coiners of the word meant, not what it has come to mean when uttered by politicians.
It was in 2006. And Areeba had come to town. With it came the most sacred covenant the people of that peninsular district would ever have with technology. Until then, only a few had heard about the mobile phone and an even fewer people had ever seen it.
The revolution began when a mast in the hilly suburb of Kantankafori started rising and soon towered above the town like a guardian deity.
It was not the first telephone mast in town, though. However, many residents remembered when the first one was built or how useful it was to them. Only the few rich homes, top government agencies and in the residences of heads of government institutions had phone lines. That first mast was owned by Ghana Telecom, situated at the Ghana Post Office.
This new mast was different. The imaginations and hopes of all of us who perceived the mobile phone as a status symbol helicoptered teasingly above it. At the time, we still thought the mobile phone belonged to only a select few. Like the landline phones, it appeared to be another necessary but luxurious itch that was beyond the reach of the ordinary hand, too tempting to ignore but just too far to reach and scratch.
Many, including my good self, however, lined up for our SIM cards because the price was very insignificant. We got our Areeba numbers even though most of us did not have mobile phones or dream of buying them at the time. But that thinking would soon change.
Mobile phone shops sprouted overnight like the greenery that greets the first rain of the savannah grassland. The phones came in different weights, sizes, shapes and ages. Alongside the phone shops came mobile phone repairers, who were on hand to help fix the mostly used phones that had outlived their usefulness elsewhere, but were precious enough to win the heart of a woman in Kete-Krachi.
In those days, the mobile phone was a prized possession. Those who owned them walked with the gait of the highly accomplished, as though they were at the very peak of Maslow’s Hierarchy of Needs.
I had completed senior high school and was working to gather resources for my tertiary education. Out of that, I bought a used Nokia 3410, which fell and got irreparably damaged the day my SHS senior, Addae Joshua, called to inform me that he had seen my name in “Graphic” as having been admitted to the Ghana Institute of Journalism.
Today, the mobile phone is no longer a status symbol in Kete-Krachi. It is, perhaps, the commonest commodity in every household apart from air and water.
The story of mobile telephony in Kete-Krachi is synonymous with Areeba, which would later become MTN. Scancom Ghana, operators of the network took a risk that paid off.
At the time, the road to Kete-Krachi was very terrible. The district is still deprived. Apart from the road to Tamale, one must cross a lake in order to get to Kete-Krachi. People with decent public transport services would not dare ply that route in those days. So, for the network operators to risk it all and get there meant they took a risk, which others were not prepared to take.
Besides, people did not spend much on their phones. Those were the good old days before social media, when humans valued social interactions. Those were the days when dumb phones and smart people were yet to trade places.
In the absence of the data gluttons called smart phones, the use of the phone was limited to voice calls. In that poor community, most of us stayed awake to enjoy “free night calls”. So it wasn’t really profitable to invest in rural mobile telephony.
When Ghana Telecom’s One Touch network got to Kete-Krachi later, the people of Krachi greeted it with insults: “You had your pole [mast] here for years but you sat down for Areeba to come and capture the market. You’re now coming,” they said. That’s how MTN captured the open market in many parts of Ghana.
When MTN sustained its investment in mobile money for five years (2009 to 2014 / 2015) without making profit, other networks either stopped investing or did not risk because not many Ghanaians were used to mobile money. Today, Mobile money in Ghana is synonymous with MTN.
When I came to Accra in 2006, I learnt from friends that Ghana Telecom’s One Touch network had treated SIM cards like cocaine when it enjoyed monopoly. It was very expensive and those who wanted to use the mobile phone had to endure long queues or resort to the “black market” to get SIM cards. Areeba’s SIM cards were, however, almost free and one didn’t have to struggle to get them.
My first marriage to MTN did not last long. While I was about completing my degree programme, there was a buzz about a new network that promised a revolution. It was called, Zain, which would be rechristened Airtel and would later engage in a marriage for survival with Tigo and be called AirtelTigo.
Had MTN offended me?
Airtel gave me the opportunity to choose my own number and register in my name. That was all it took to convince me to switch. By the time I realised my new bride did not offer any superior qualities than “the wife of my youth” I had made so many contacts that I didn’t want to discard that number. That’s why I got stuck with AirtelTigo.
Fortunately, the technological marriage does not prohibit polygamy so I added MTN. Later, an opportunity was created to enable users port from one network to the other without changing numbers, but I was okay with two different networks.
One Touch, after it was sold to Vodafone, became more attractive and its data service is said to be very good. When the network brought its residential broadband services to my neighbourhood, I subscribed to it. They came first to this area.
The connection was almost excellent until recently, but a man who files for divorce and the hunter who kills the elephant must possess enough of the same resource – time. I don’t have much of it now so I won’t seek an immediate divorce with Vodafone.
I still buy MTN data for work outside my house because I move and travel across the country and MTN appears to be “everywhere you go.”
The flexibility of changing networks and even porting from one network to the other without having to change one’s number mean that the ability to win more customers depends on the quality of service, innovation, size of investment and the mind to invest in places like Kete-Krachi that did not have huge prospects at the time, but which now depends heavily on mobile money services.
So I was surprised when I woke up recently to read that the Ministry of Communications had decided to break MTN’s “near-monopoly” in the telecom sector. A statement issued by the ministry said, “The policy directive is motivated by evidence of a growing market imbalance and creation of a near-monopoly in the telecom sector.”
It said the imbalance would “potentially expose the country to the dictates of the dominant operator and negatively impact on competition and choice for the consumer as well as investments within the sector.”
My initial reaction was: why would you break a monopoly in a liberal market/industry that is governed by the interplay of the market forces of demand and supply; a monopoly out of fair play, one you had no hand in creating?
Those who know better than I, however, say it is a normal industry practice often designed to ensure that the significant market player (SMP) does not take undue advantage of competitors and consumers. Their problem is that the processes of doing that had not been followed by the government before the announcement.
They contend that government policies over the years have curtailed the potential problems with SMP to a large extent in the telecoms sector and have ensured fair competition. They cite Mobile Number Portability, Tower Sharing, Interconnect Rate Regulation, and Mobile Money Interoperability as some of the policies in this direction.
Experts in the sector also say specific SMP-like policies have already been targeted at MTN, and further policies would only prove counterproductive. For instance, MTN is the only telecoms operator paying the National Fiscal Stabilization Levy. The company is said to have contributed about GhS180 Million over the last three years to this fund, which makes about 20% of the total NFSL tax annually.
MTN is also required to bear the full cost of any fibre damage despite the fact that most cuts are caused by recklessness in road and building projects. This has resulted in MTN relocating 220kms of fibre (almost the same as the distance from Accra to Kumasi) in the last three years at a cost of over USD3 Million.
It is the only telco required to list on the Ghana Stock Exchange (GSE). MTN listed on the GSE in September 2018 and has over 127,000 local shareholders. MTN listed on the GSE with a localisation requirement of 35%. Barely a year later, this requirement for localisation was reduced to 25% in the 2019 4G auction, in which MTN was excluded.
Besides, when Vodafone Ghana secured the licence for a USD30 Million spectrum, payment was allowed in 3 instalment payments ending December but MTN was required to make single payments for spectrum acquisitions.
Some critics of the government’s move say the recent happenings between the government and the telco cannot escape the attention of any objective observer. The refusal of MTN to hand subscriber data to the government is the latest of such frictions.
But MTN and the telecom industry are not the only ones feeling weight of similar government policies in recent times by the same regulator.
Joy FM and Asempa FM are in court because the government has threatened to shut them down should they fail to comply with a new policy that requires them to reduce their reach from a radius of 100km to 45km. A 2019 letter signed by the Director General of the NCA, Joe Anokye, and sent to Joy FM had the following conclusion:
“Flowing from the above, the Authority [NCA] notifies you of our decision to enforce compliance with the requirements of the law and policy. Multimedia Group Limited (Joy 99.7FM) and Bell Communication Limited (Asempa 94.7FM) are advised to comply with the directives on the 45KM radii coverage, failing which the stations will be shut down on Friday, 8th November 2019.”
The Ghana Independence Broadcasters Association (GIBA) has argued that no serious commercial radio station with significant investment will survive if the NCA carries this policy through.
A 2018 petition to the Minister of Communications by ten media conglomerates said there were no limitations when frequency authorisations were first given to commercial radio stations. Later, at the instance of GIBA, the NCA and the operators reached a consensus to limit the reach at 150km radius. The NCA later reduced it to 100km.
After investing in equipment and staff, the NCA now wants them to further reduce their reach to 45km because the spectrum is scarce and others are in need of the space.
GIBA argues that as many as 471 frequency authorisations had been issued by the third quarter of 2017, out of which 376 FM stations were in operation. Many more have since been added to this saturated space.
Joy FM, Asempa FM, and now MTN, have resorted to the law courts against these regulatory measures. The government and its regulatory agency, the NCA, have often argued that their actions are backed by law.
However, when a problem knocks at the door, it is wiser to send prudence to meet it before legality is deployed. It is even worse when you send legality when there’s no real problem knocking.
The internet and social media are already killing the commercial viability of traditional media and policies such as the limitation of frequency radius will further nail the coffin of the few properly run radio stations. Their reach will be reduced significantly and it will affect their advertising revenues.
Besides, what is the sense in taking frequencies from the few viable and helpful ones such as Joy, Citi and Peace FM and giving them to political figures and cronies who end up adding to the woes of our airwaves?
For companies like the MTN, our drive for foreign direct investment will be undermined if this is not handled well. MTN is said to have invested USD3 Billion in infrastructure alone. Over USD500 Million was invested in the last three years alone, resulting in Government Taxes of about GhS4.5 Billion in the same three-year period.
Besides its numerous social responsibility interventions, MTN is not only the highest tax paying company, but it is also the backbone many sectors such as the media and entertainment. With 132,000 active agents nationwide, its role in employment creation cannot be underestimated.
If the dominance of MTN is broken and there’s no corresponding investment from the other competitors, how would that benefit the government and consumers? Would we have gone or come, as we say it here?
And if the government is concerned about significant market players, it should equally be interested in companies like Zoomlion, which is a private monopoly created the government. Unlike MTN, which grew through investment, innovation and superior marketing and service delivery, the government handed multiple sanitation contracts to the scandal-ridden Zoomlion when it had no single waste management truck.
If MTN or any company is involved in wrongdoing, regulators should be tough on them. However, with policies of this nature, we should be mindful of the business environment we are creating. Already, almost everything in Ghana revolves around politicians and measures such as this would further poison the business environment if due process is ignored.
Nothing swells the head of politicians more than the knowledge or assumption that the world swirls around them. But in their exaggerated sense of self importance, they should close their eyes and imagine what would happen if, tomorrow, the telcos shut down.
Or radio stations such as Joy FM, Peace FM and Citi FM are no more.
The writer, Manasseh Azure Awuni, is a freelance investigative journalist and editorial consultant. He is the author of three books: “Voice of Conscience”, “Letters to My Future Wife” and “The Fourth John: Reign, Rejection & Rebound”. His email address is [email protected]