Government Steps In To Control Mtn’s Supremacy
For years now, MTN Ghana seems to be in a comfortable lead in the mobile telecommunications network in the country. The number of users keeps getting stronger and stronger and has overshadowed other networks like Vodafone and AirtelTigo. It has become necessary for this supremacy to be cut off to provide a level playing field for all network operators. MTN Ghana has almost seventy-five percent of the telecommunications market share.
A trend which MTN has shown over a three (3) year period and into the first quarter of 2020.
This it believes “clearly shows an uncompetitive and unprofitable environment for less dominant players in these industries” though the statistics are impressive and showing growth within the telecommunications and financial sectors.
Per the National Telecommunications Policy (NTP), “any operator with 40% or more market share in voice, data, SMS, and value-added services like Mobile Money, is considered a Significant Market Power (SMP). And MTN falls within that category.”
“With this designation of SMP, the Regulator is required to take corrective measures under the law to facilitate more market competition, ensure proper pricing for consumers and facilitate the overall growth of the telecommunications industry,”
The scale of MTN’s dominance in Ghana was shown by the success of its 2018 initial public offering when MTN Ghana sold its shares mainly through mobile money with 85% of buyers purchasing their stock through its Momo Wallet service. The IPO also made history for being the largest ever undertaken on Ghana’s stock market with the company raising around $237 million.
But as research has suggested, a lack of adequate competition among telecoms operators in African countries comes at a cost for local users. Last year, a broadband affordability report by the Alliance for Affordable Internet (A4AI) cited market dominance as one of the reasons for higher costs of internet access on the continent with the average price for one gigabyte of data costing 7.12% of the average monthly salary—much higher than the defined affordability benchmark of 2% of average income.
What is the Government of Ghana doing to prevent this?
It has issued a directive to the National Communication Authority (NCA) to enforce the provision of the Electronic Communications (EC) Act 2008 plus the National Telecommunications Policy to dress glaring disparities in market share and revenue share in the sector. To correct the imbalance, the government is immediately putting in place an Asymmetrical Interconnect rate in favor of the disadvantaged operators. Additionally, it will require the SMP to not have differential prices for on-net and off-net transactions and ensure various operator vendors are not subject to exclusionary pricing.
It will also put ceiling pricing on all minutes, data, SMS, Mobile Money and review and approve all pricing by the SMP as required by law.
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What does the Government seek to achieve after limiting mtn?
The government wants to promote proper and healthy competition in the sector and offer convenience in addition to secure a better pricing policy for the consumers and customers.