The declaration of MTN Ghana as a Significant Market Power (SMP) in the country’s telecommunications sector has resulted in an asymmetric savings of GHC86.6 million for the smaller mobile network operators (MNOs) in the last two years.
The SMP was meant, among many other things, to set a level playing field and limit the ability of the company to manipulate its tariffs, control its profit margin and possibly its ability to increase obstacles to potential new entrants or smaller players in the market.
The savings made by the non-SMP players in the industry saw the second biggest telco in the country, Vodafone Ghana, now Telecel, rake in GHC50.4 million, representing 58%.
The third biggest player in the industry, AirtelTigo, saved GHC34.8 million, representing 40%, while, Glo Ghana had GHC1.6 million; 2% of the total savings.
According to the industry regulator, National Communications Authority (NCA), the asymmetric interconnection revenue savings per non-SMP was between October 2020 and December 2022.
MTN dominance
Given its size and dominance in the telecoms market in the country, the NCA declared MTN Ghana as an SMP.
Subsequently, on 1 August 2021, the telecommunication giant implemented the directive from the NCA on phase-1 of the on-net/off-net price differential removal on default tariffs for voice, data and SMS.
On-net/off-net differentials
The implementation of the SMP, among other things in part, required the removal of on-net and off-net price differentials.
For instance, it meant that there should not be any difference in call and SMS rates between an MTN-to-MTN communication and a call/SMS from an MTN number to any number on the other networks.
MTN Ghana has been able to use that strategy over the years to outsmart its competitors, making it the biggest in the industry, with almost 60 per cent of the market share and growing with each passing year.
Correcting the imbalances
In line with the declaration of MTN Ghana as an SMP, NCA proposed measures to correct imbalances in the telecoms market, which include: Application of 30% asymmetrical interconnect rates for two years, subject to market response, in favour of the disadvantaged operators — per the law; Set floor/ceiling pricing on voice, data, sms and mobile money, among others; and review and approve all pricing by MTN as required by law.
It also requires 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; and Ensure that MTN’s access to information does not disadvantage any value-added service of non-SMP operators.
NCA explains
It is, however, not clear whether the non-SMP networks have ploughed back the savings into their operations to better their network service and improved their market share over time to enable the generality of Ghanaians to also benefit largely from reduced tariffs.
Asked whether non-SMP players are investing or plouging back their savings to bring them up to speed, the director-general of the NCA, Joe Anokye, said: “So one thing that specified in SMP was the fact that the smaller players should reinvest in the savings from the asymmetry that connects right into infrastructure, but there’s no evidence to show that.
He, however, indicated that the NCA does not categorically tell the smaller players what they should use that savings for.
The NCA boss admitted that the nature of the business required huge capital outlay and enormous liquidity to operate seamlessly, an indication that presupposed that the savings made might have been used to improve their liquidity position.
Catch up
As to whether they are all interested in catching up with the dominant market leader, MTN, Anokye said the market space has been very competitive and “I am pretty sure they want to compete and I believe MTN also does not want to become a monopoly. I think they also want to make sure that the marketplace is fair. Part of the remedy is national roaming.”
