Correcting the telecom market imbalance – the co-location tower cost factor

At the launch of MTN Ghana’s 25th Anniversary, the Minister of Communications and Digitalisation, Ursula Owusu-Ekuful, urged MTN to take advantage of its significant market power (SMP) status and drive the entire telecom industry along the path of growth.

For the ordinary man, that sounded worse than the proverbial ‘knocking a child on the head and asking him not to cry’. In fact, in this case it was like the child is being asked to ‘laugh’ after a hard knock on the head. But for MTN, it appears this is just one more opportunity for them to do what they do best – strategise and maximise their benefits from what was designed to arguably curtail their growth in order to “correct the imbalance in the telecoms market”.

Background

Government, in June 2020, declared MTN Ghana as SMP. Per the National Communications Policy, it takes one to hold 40 percent market share of voice, SMS, data and mobile money over a considerable period for one to be declared SMP. In declaring MTN SMP, government said MTN had controlled more than 75 percent of voice, SMS, data, mobile money and revenue of the telecoms market for many years.

Indeed, the record shows that MTN had for more than 15 years held more than the 40 percent required to declare them SMP, but successive governments sat by and watched until 2020. It is worth noting that the declaration came exactly six months after yours truly wrote an article titled ‘Are other telcos working for MTN?’ in December 2019, highlighting the industry’s one-sided growth and making the case that the natural thing to do is to name

MTN SMP and prevent a monopoly as the International Telecommunications Union (ITU) advises.

So, now MTN is the SMP the industry regulator has set out seven regulatory remedies for MTN to implement. So far, MTN has implemented three and is far advanced in the process of implementing a fourth while waiting for regulatory direction to implement the remaining three.

The three SMP remedies MTN has implemented so far are:

• The application of a 30 percent asymmetrical interconnect rate reduction for two years – this means for a period of two years, beginning October 1, 2020, for every call from MTN that terminates on other networks, MTN will charge that network an interconnect rate that is 30 percent lower than the default interconnect rate.

• Review and approval of all MTN pricing by the NCA, which also began October 1, 2020. This is to ensure that MTN is not out-pricing the other operators out of competition. Indeed, Techgh24 learnt that MTN had been told by the regulator never to have the lowest prices on the market.

• Implementation of the onnet / off-net, price differential removal on default tariffs affects data and promotional offers as well. This means calls and SMS cost between MTN numbers is the same as cost between MTN numbers and numbers on other networks. With regard to data, it means MTN has virtually reverted to default data rates and collapsed some of its juicy offers like Mush Up and others.

The fourth one in the pipeline is National Roaming, which will require MTN to share infrastructure with other telcos in a way that allows customers of the other telcos to have access to MTN connectivity services when they get to locations where their original service provider has no connectivity. So, for instance, if a Glo customer gets to a village where MTN has connectivity but Glo has no connectivity, MTN will make it possible for Glo customer to have access to its services – and then MTN will share the revenue with Glo based on some terms.

According to MTN, it has already made significant progress in its discussions with the regulator to implement national roaming in the country; and has also engaged in bi-lateral discussions with other operators and is far advanced in the terms of agreement with at least one operator, and has completed technical tests for standard national roaming.

MTN shows commitment

So, MTN has clearly showed commitment to carrying the industry along in line with the SMP status. But beyond just implementing some regulatory remedies, MTN has gone a step further to show that it is more than willing and ready to drive growth in the entire industry for the benefit of Ghana as a whole.

Off-net Airtime Purchase on MTN MoMo

One key way MTN has done this is by enabling a feature on its Mobile Money Menu, which allows its customers to buy airtime for people on other networks using mobile money. This is a first for any telco. Other Fintech platforms like ExpressPay, Hubtel, Zeepay and others have such services, but MTN is the first traditional telco to empower its customers on a large scale to buy airtime for people on other networks.

In fact, when the current MTN Ghana CEO, Selorm Adadevoh, was working with the now state-owned Tigo Ghana, he implemented a similar strategy that was piloted but never really went public. This writer had the privilege of experiencing the service once then, but it did not seem relevant at the time. But now MTN under Selorm has implemented it at full scale.

Ambition 2025

That laudable move is however not in isolation. It is a small part of a grand transformational strategy at MTN called the Ambition 2025 Strategy, aimed at turning MTN into a platform