By Samuel DOWUONA
Over the past week or two, there has been heightened agitations on social media in Ghana over high mobile data prices.
The immediate trigger of this debate was a report from cable.co.uk, which indicated that out of 237 countries studied, average mobile internet prices in Ghana is the 33rd lowest in the world; and in Africa Ghana has the third lowest price of US$0.40 per 1GB (same as Brazil), behind only Malawi (29th) and Nigeria (31st).
So, in effect, Ghana has the second lowest prices in West Africa. This is not political propaganda. This is a very credible independent multinational body telling us that, based on scientific research, mobile data prices in Ghana is one of the lowest in Africa.
Majority of the commentators on social media simply do not believe in the report because, prior to that, there has been agitations against repeated mobile internet price increases, particularly on MTN Ghana, which has the biggest number of customers in Ghana.
The irony is that these price increases are happening at a time when quality of service has become painfully poor across board.
Customers of all three telcos – MTN Ghana, Telecel Ghana, and AT Ghana have been complaining for more than a year now about worsening quality of service, and we hear very little from the National Communications Authority (NCA) on quality of services issues lately.
It was only recently, MTN informed customers that it was carrying out some network upgrade, and that is responsible for the lingering service disruption. Until then, all stakeholders have been dead silent about poor quality of service, while prices keep increasing. MTN alone, has increased prices more than once in the last one year.
Speaking of price increases on MTN, it did happen in a vacuum. It was backed by a national policy rooted in a long-standing ITU (International Telecommunications Union) principle designed as a regulatory intervention to prevent monopolies in the telecoms industry, drive competition and innovation, and protect consumers’ right to choice.
The ITU principle allows countries to name one or more dominant industry players significant market power(s) (SMP) when they grow to levels where they are independent of the rest of the market and their size and conduct threatens or potentially threatens to collapse competition and comprise consumers’ right to choice.
In some countries, when dominant players gain more than 25percent market share, that is enough to declare them as SMP. In Ghana, the National Communications Policy places the threshold at 40percent.
In June 2020, the Minister of Communications and Digitalization, Ursula Owusu Ekuful declared MTN Ghana as SMP. The reason she cited was that for several years MTN had controlled over 75percent of the telecoms market in Ghana, in terms of voice, SMS, data, value-added service like mobile money and even revenue.
Indeed, other data at the time, even suggested that over 70percent of all calls terminated on MTN, and MTN also controlled even more than 90percent of the mobile money market, including even revenue from that space. As late as 2023, three years after declaring MTN SMP, MTN still controlled 90percent of mobile money revenue in Ghana.
Indeed, long before MTN was declared SMP, there were signs that the industry was gradually sliding into a monopoly as most of the multinationals in the industry had either left or were on their way out; and others who were interested in the Ghanaian market, were also apprehensive of the shear size of MTN Ghana and what implications it had for any investor.
So, the Minister was emphatic that the NCA was going to put out measures to correct the grave market imbalance. Those measures were originally geared towards making other players competitive, attract more investors into the market, prevent the market from sliding into a monopoly, and then ultimately to give consumers choice and protect them from being abused by the dominant player.
NCA eventually put out seven measures as follows:
With immediate effect, there will be an application of a 30percent Asymmetrical Interconnect rates for two (2) years subject to market response, in favour of the disadvantaged operators, in accordance with the law.
Set floor/ceiling pricing on Voice, Data, SMS, Mobile Money, etc.
Review and approve all pricing by MTN as required by law.
Require MTN not to have differential prices for on-net and off-net transactions.
Ensure various operator vendors are not subject to exclusionary pricing or behaviour.
Ensure that MTN’s access to information does not disadvantage any Value-Added Service of non-SMP operators.
Require MTN to present implementation plans on National Roaming Services within the next 30 days for execution on or before the next 90 days.
So, from the forgoing, it is clear, per points numbers 2, 3 and 4 that price control, particularly on MTN, is a regulatory intervention adopted by the NCA, based on government policy, to ensure that MTN does not price out the rest of the market and create an artificial monopoly and then deny consumers choice. In fact, MTN was given a direct order not the have the lowest prices on the market. The reason in very simple. The other industry players are unable to reduce prices like MTN could.
So, if MTN’s prices are not controlled, they will eventually price out every other player, and soon the country’s telecom industry will slide into a monopoly like we have with water and electricity. This measure is in line with the spirit and letter of the ITU principle for preventing monopolies and protecting consumers right to choice.
As a country, we have lived with a monopoly in the telecom industry before – the state-owned P&T (Post and Telecommunications). The experience was not palatable. Telephony was the exclusive preserve of the elite in society; the process of securing a telephone line was fraught with cronyism and corruption. It took months to secure a single telephone line at a very high cost. This is not something we want to go back to. What we have now is a blessing we need to protect and guard with our very lives, even as consumers.
This is why it is very important that prices, particularly on MTN are controlled to ensure that they do not continue to pose a threat to competition in a way that pushes every Ghanaian to become an MTN customer.
That kind of situation destroys our right to choice and poses the risk of MTN abusing our right to affordable and good quality service in the future. We all agree that with utilities like water and electricity, if we had choices, a lot of Ghanaians would have opted out of the sloppy ECG Ghana and Ghana Water services for something better. But we have no choice. We simply do not want another monopoly in the telecoms industry.
Asymmetrical Interconnect rate
Beyond price control, one other critical SMP intervention designed to bridge the market gap is the asymmetrical interconnect rate, which helps the non-SMP telcos to save 30percent of whatever money they pay to MTN monthly for terminating traffic on MTN. Remember we mentioned that about 70percent of all calls and even SMS terminate on MTN.
So, when the interconnect traffic and its related fees are reconciled at the end of every month, MTN is a perpetual net winner across board. The NCA therefore had to step in a save the others some money just to keep them in business. NCA reported that in the first three years the asymmetrical interconnect rate intervention saved the non-SMP telcos some GHS86.6 million. This is not much compared to how much MTN invested in its network over that period, but it is a good start.
National roaming and Tech Neutrality
Again, as part of the corrective measure, the NCA has facilitated a national roaming policy, in line with measure number 7. This means customers of a network which has no or poor connectivity in a particularly community can get service from another network (MTN), which has better connectivity in that community, then the two telcos will share the revenue generated from that process. Closely related to that is a technology neutrality policy.
The most obvious manifestation of that policy is the recent award of a license to a special purpose vehicle called Next-Generation Infrastructure Company to establish a shared 4G and 5G infrastructure for all industry players to buy into. This means the playing field for the deployment of advanced technology will be levelled. This a complete departure from the mess we created with the auctioning of 4G licenses at a political price in 2015, which has created the mess we have in the industry today.
Another manifestation of tech neutrality is allowing smaller telcos to re-farm their existing spectrum to deploy higher technologies. These are critical to correcting the market imbalance. Already, the SMP has taken a huge lead in the 4G space due to the 2015 mistake, but the technology neutrality policy promises to reset the industry and bridge the yawning gap to some extent, provided the smaller players invest as required.
So why is so difficult for Ghanaians to understand why data prices on MTN has to go up? Why is this simple idea such a hard sell? And why are people now calling for the NCA to be dissolved and not the entire government?
It has been four years since the MTN was declared an SMP. Ghanaians should have gotten it by now. But the recent agitations on social media indicates that we still don’t get it. A number of reasons account for this:
NCA has in the past refused to openly take responsibility for the data price increases on MTN. There have been times when MTN had been forced to say it increased prices because of rising operational cost, when in fact the price increase was based on a directive from the NCA deriving from a government policy. In fact, NCA even compelled MTN to collapse its affordable Data Zone bundles and threatened to sanction MTN if they ever offered lower prices than other players. The NCA should have owned this narrative and run with it from the onset.
The other reason is, because NCA failed to own the narrative, some state actors took it upon themselves to fuel disinformation. There were people at no less a place than the Ministry of Communications and Digitalization (MoCD) who put out write ups, claiming MTN intentionally increased prices unilaterally to exploit consumers and make the government look bad.
In their unlearned propaganda, They even suggested that MTN could have lowered prices to be at par with the smaller telcos. Laughable. Clearly, these ignoramuses completely ignored the fact that MTN was directed by NCA to increase prices. They were either intellectually dishonest or were nothing more than loud-mouth political animals attacking the “victim” of a national policy (MTN) to score cheap political points.
Constant review from both ends
What is left now is for the NCA to keep constantly reviewing the impact of the various SMP measures it has put in place to ensure that they are actually yielding the required dividends. The review must be on both sides of the coin – SMP and non-SMPs. Here are some observations and suggestions in that regard.
Three years after the NCA implemented the SMP measures, its own results indicated that the intended beneficiaries of the SMP measures – AirtelTigo (now AT Ghana), Vodafone (now Telecel Ghana) and Glo, had become worse off in terms of customer base and revenue, while MTN, the SMP, had rather gained significantly on all fronts. The NCA needs to take a critical look at that data and find out what is causing that failure, so it can be rectified. Maybe it is time to engage the expert community on that.
NCA also reported that, through the 30percent asymmetrical interconnect rate measure, it saved the smaller telcos some GHS86 million plus in three years. The NCA stopped short of stating whether it monitored to ensure that those moneys were properly invested towards closing the market gap. It is our considered view that, to the extent that NCA feels compelled to squeeze money out of the SMP and give it to the smaller players, it is important that the NCA follows that money to ensure it is strictly applied towards bridging the market gap.
The NCA also has a responsibility to keep an eye on the data price increases, particularly by MTN to determine whether those increases are not just burdening consumers unduly and putting more money into MTN’s pocket without helping to correct the market imbalance.
In fact, as stated above, since the SMP measures were put in place, MTN has been growing while the other telcos keep losing customers. MTN has also been reporting very impressive financial performance over the period. Unfortunately, apart from January 2023, for the rest of 2023 and the whole of 2024, the NCA has failed to publish subscriber base figures, so it has become difficult to compare the numbers and know what is happening.
In it latest annual report, MTN stated that it had lost about 1.4 million customers, but that was attributed to SIM re-registration and not SMP measures. It is not clear whether the other telcos made gains or losses over the period. What is NCA hiding?
One other critical part of this whole puzzle is the role the leading independent tower company in Ghana, ATC Ghana plays in giving MTN an urge over the smaller telcos. For ten years, between 2010 and 2020, MTN held 49percent shares in ATC Ghana, which also employed past MTN technical staff.
That relationship has been fingered as a reason for how ATC gave MTN preferential treatment over others. In fact, as recent as early this month, ATC disconnected an important player like Telecel Ghana over a dispute regarding unpaid bills. Two years prior, ATC disconnected two ISPs.
Even though MTN sold its 49percent shares to ATC, it will do the the country a lot of good for NCA to review that whole ATC-MTN relationship within the context of correcting the market imbalance; otherwise, all the other SMP intervention may not necessarily amount to much.
It is also very critical for NCA to own the narrative on this matter and bridge the gap that allows ignorant political propagandists to jump into the fray and try to make industry players look bad unnecessarily.
In conclusion, let me state that whereas the ongoing agitation about data price increases may be justified due to the frequency with which they have happened, particularly on MTN, data tariffs in Ghana still remain one of the lowest in Africa.
Moreover, the price increases on MTN are grounded in ITU principles around the SMP concept, designed to prevent a monopoly, drive competition and protect consumers’ right to choice in the long run.
And that is the elephant in the room on this matter.
>>>The author is a multiple award-winning telecoms and technology industry journalist, and also the CEO of www.techfocus24.com. He can be reached at [email protected]
Source link : https://thebftonline.com/2024/07/26/data-prices-increase-smp-and-the-prevention-of-a-monopoly/
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Publish date : 2024-07-26 10:02:05
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