ICT chamber raises red flag; Says NCA frustrates US$200m investment

The Ghana ICT Chamber has raised an alarm over the intention of the National Communications Authority (NCA) to sell next generation spectrum to foreign-owned telecom companies.

The move, according to the chamber, whose membership includes Surfline Communications, Gold Key Telecoms and Blu Telecoms, amounted to what it described as the “NCA’s broken promises to ring fence the deployment of next generation Long-Term Evolution (LTE) capacity to Ghanaian-owned companies only”.

But the Director-general of the NCA, Mr William Tevie, in a sharp rebuttal, refuted the allegations, claiming that the move was well intended to improve Internet penetration in the country.

However, the chamber argued that the move, if carried out by the industry regulator, would cause members of the chamber to lose more than the US$200 million they had so far invested in their businesses, out of which nothing had yet been recouped as return on investment (ROI).

A petition from the chamber, signed by Dr Yaw Akoto on behalf of broadband wireless access (BWA) operators, to President John Dramani Mahama seeks audience with the government to explain the chamber’s position and compel the NCA to reverse its decision.

Argument of local companies
“As indigenous Ghanaian companies, the BWA operators group is enthusiastic about supporting the government of Ghana’s goals for a national broadband infrastructure,” the chamber said, adding, “The BWA group seeks to reach all parts of the country and promote public and private sector businesses and employment opportunities.”

Against that background, it said, “We collectively value the opportunity for indigenous Ghanaians to participate in the telecoms industry and in particular the NCA’s process of licensing frequency in the 800 MHz band.”

It, however, noted that “we strongly believe that the process outlined in the Selection and Award Procedure document must be revisited in order to achieve the objectives of the government”.

The chamber noted: “If the NCA conducts the pending auction as proposed, it will undermine the attainment of the government’s objectives and critically handicap the indigenous telecom sector.”

But some telecom analysts have argued that the local players have no financial muscle to play in the ICT sector which constantly requires huge capital investment.

According to them, the best way out was for the local players to partner the multinationals to also reap some of the benefits from the growing sector.

BWA operators demand
The ICT chamber said the pending decisions to be made by the NCA had far-reaching consequences in that the telecom sector would forever be controlled by the incumbent mobile network operators (MNOs) who were all foreign entities.

Subsequently, it demanded that the eligibility criteria for the auction must be revisited, so that current BWA licence holders were fully protected from direct competition from the MNOs.

“We believe that the concerns of the BWA operators group must be addressed before commencement of the auction,” it said.

Multinationals dominate ICT sector
For more than two decades multinationals have dominated the Ghanaian telecom sector, leaving no room for Ghanaians to have a bite of one of the most lucrative sectors of the economy.

These are MTN, Vodafone, tiGO, Airtel, Glo and Expresso.

Even with poor quality of services to their customers, these multinationals have continued to make the terrain more difficult for any indigenous company to enter to compete favourably.

Accordingly, the ICT chamber said by the terms of the BWA licence issued by the NCA, the BWA operators must be made to focus exclusively on mobile data services.

“The future for data services is very positive, as voice services become commoditised. There is a high potential risk to the BWA operators because of the NCA’s intention to license the 800 MHz spectrum to MNOs,” it argued.

It said the NCA, in its move, would nullify the first mover advantage in the 4G LTE data services market for the BWA operators, noting that “BWA operators which are local companies can dominate the data services market in the near future. BWA operators see the protection of their data service businesses as a game changer in the telecom space”.

NCA explains
Explaining, Mr Tervie said, “We specifically mentioned that the consortium or entity should have 35 per cent Ghanaian ownership for the two 10 MHz spectrums that we are selling.”

“We sold the first 4G licence to wholly Ghanaian owned entities,” he said, noting, however, that so far only Surfline out of the four had been able to roll out “anything substantial on its network”.

Mr Tervie said in order to push Internet penetration in the country, “we have to make it possible for entities to come in to raise the number of available handsets on the market”.

“These spectrums are part of the dividends we will be getting from migration from analogue to DTT,” he said, adding, “This is a very capital-intentive business and if the entities do not have enough funds, it will defeat the purpose of the sale of the spectrum, for which reason it will be difficult to deploy the networks”.

Funding digital migration
There are reports to the effect that the government is struggling to raise funds to accelerate migration from analogue to DTT, hence the move to sell the new spectrum to MNOs.

But in its reaction to that idea, the chamber noted categorically: “If the government’s intention is to sell the 800 MHz spectrum to primarily finance the DTT roll out, the indigenous BWAs are willing to resolve the financial challenge of the government by acquiring the spectrum on appropriate payment terms.”

It pointed out that there was no need for the government to finance the digital migration by reversing good local content policies that helped indigenous Ghanaians to acquire more control in the telecom sector.

Against that background, it said, the MNOs should not be permitted to take up the 800 MHz spectrum, saying, “Even a single lot (2×10 MHz) of the 800 MHz spectrum still poses a serious threat to the indigenous businesses of the BWA operators.”

It insisted that the MNOs should be totally excluded from participating in the 800 MHz spectrum until the availability of universal licences in 2019 when the BWA operators were firmly in place and had recovered their 4G LTE investments.


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