A one time top telecom executive in Ghana has said that the newly introduced technology neutrality policy by the National Communications Authority (NCA) should have happened more than five years ago.
He however added that it is better late than never and positive too, because it gives the flexibility to the smaller telcos – Vodafone and AT Ghana – to manage their spectrum as they see fit based on their strategy.
NCA on Tuesday announced the it has introduced technology neutrality, which allows the two non-SMP telcos (Vodafone and AT) to re-farm their existing spectrum slots in the 900MHz, 1800MHz and 2100MHz bands to deploy 4G technology.
Vodafone has a limited 4G network, while AT has none. Meanwhile, the market leader, MTN had acquired loads and loads of spectrum that it can leverage to deliver very high quality 4G service. MTN is even pushing the regulator for a license to roll out 5G, having readied over 1,300 cell sites for the purpose since 2021.
Since the declaration MTN as significant market power (SMP) in June 2020, the NCA has been implementing some measures aimed at correcting the grave imbalance its own policies and negligence has created in the market.
Technology neutrality is one of a number of such interventions meant to prevent MTN from becoming a monopoly and using its position to bully existing players and ward of prospective new entrants. It is also to prevent a situation where consumers are stack with only one choice and thereby short-changed on service quality and pricing.
This new measure, in particular, is expected to help the two non-SMP telcos to improve on the quality of their network and services and provide Ghanaians with more choices.
But the Consultant, on grounds of anonymity, said he thinks the technology neutrality measure should have come five years earlier, which is three years after MTN first acquired a license for 4G at US$67.5 million in 2015.
Why late?
At the time MTN was allowed into the 4G space, the Broadband Wireless Access (BWA) operators, who were strictly indigenous companies representing local content in the telecom industry, had only had three years to operate exclusively in that space.
When NCA, under the auspices of the then government, decided to unleash a giant like MTN on the BWAs, there was widespread public outcry against the move, but the government’s motivation then was the need for money to meet the global deadline for the implementation of a digital terrestrial transmission (DTT) program, meant to transition Ghana from analogue TV to digital TV regime.
So, the Consultant thinks that when, after three years of MTN being the only traditional telco with a meaningful 4G network, it became apparent that the other telcos still did not have the funds to acquire the license at the price MTN bought it, that was then time for the regulator to have implemented a technology neutrality measure to enable the smaller players get into the space for less.
The argument is that if three years was enough for the NCA to have ended the exclusivity rights of the BWAs and allowed MTN into the space, then three years should have been enough for NCA to have implemented technology neutrality after MTN had had exclusive opportunity as the only traditional telco with 4G in Ghana.
“It is really sad how badly they (NCA) have operated,” he said.
Advice for non-SMPs
The Consultant also noted that even though technology neutrality provides a glowing opportunities for the smaller telcos to innovate, they need to realize that at this stage “they cannot compete head on with MTN”, so, they have to decide what niche they want to become the champions of, and focus on dominating those areas and delivering returns to their shareholders.
Currently, Vodafone Ghana has a new investor, Telecel Group, which recently acquired 70% majority shares in Vodafone and promised substantial investment into the network to make it competitive and profitable.
AT Ghana, which is now wholly-owned by the government of Ghana at a value of US$1, will soon be announcing an equity partner who will also be investing to improve the network and make the company competitive and profitable.
The consultant thinks the technology neutrality policy presents these two with the opportunity to strategically focus their investment on network improvement, and then innovation around becoming a niche based on insights to create great experience for customers and value for share holders.
He said it will be a bad strategy to focus on competing with MTN, a player that has way more spectrum than anyone in the market and has proven too tough for any regulatory measure to curtail, much less a competitor.
For instance, the three year period between December 2019 and February 2023, when SMP measures have been in place to help the smaller telcos to grow and become competitive, MTN has rather grown market share from 55% to 67%, while Vodafone lost market share from 22% to 18% and AT Ghana also lost from 21% to 14.7%.
Additionally, it is estimated that MTN currently commands 75% of telephony revenue, 80% of data value and over 90% of mobile money subscriptions and revenue.
Clearly, competing with MTN is out of the question, and focusing on a niche, like the Consultant said, is the way forward for Vodafone Ghana and AT Ghana.
