Breaking MTN monopoly not punishment-Telecom analyst
A telecom analyst, Patrick Boateng, has thumbed up the government’s decision to reform the telecom sector through a level-playing field that will break MTN’s dominance.
He insisted that the move, which could break the back of MTN’s market share, was not a punishment.
MTN currently has 57% voice market share and 67.8% of the data market share. Three other telcos–Vodafone, Airtel-Tigo and Glo share the rest of the market.
Ghana’s telecom regulator, the National Communications Authority, on June 8 indicated that the significant market power policy would create a competition that would inure to the benefit of consumers.
Critics of the policy insist that it an anti-free market decision and likely to affect investor confidence.
Mr Boateng disagreed.
“The intention here is not to punish the SMP but to create a market space where everyone, the industry players who are big investors, government, consumers and other players have a fair chance in prospering.
“Also, considering that when you are in monopoly the monopoly might behave in his own interest which may not necessarily be in the interest of consumers or anybody else, he said on Accra-based Citi FM.
Ghana introduced the mobile number portability system on July 7, 2011, giving mobile phone users the opportunity to switch service providers when dissatisfied with service providers.
Almost a decade later, the benefits are lost on consumers. But Mr Boateng maintained it was necessary to give consumers options and the benefit of competition.
“In a number of ways, consumers need fair and reasonable pricing. They need the choice of freedom to switch networks. They need all kinds of innovative products that they can access and by doing so the regulator then opens up space and basically forestalls any negative anti-competitive behavior.
“In a number of ways, consumers need fair and reasonable pricing. They need the choice of freedom to switch networks. They need all kinds of innovative products that they can access and by doing so the regulator then opens up the space and basically forestalls any negative anti-competitive behavior.
“To leave the SMP without acting, then consumers would have the lack of choice, lack of innovative products, unfair pricing, unreasonable pricing in the absence of competitors who can also introduce new products,” he said.
While some analysts took on the regulator for sitting on the fence while MTN grew beyond the SMP policy in the last 13 years, Mr Boateng observed that the regulator had been reactive because it needed to factor a number of considerations into its decision to draw a boundary.
“It is unwise for a regulator to act too quickly and then regret it without having considered all the factors. As a regulator, it is wise to wait and watch the market, and exercise some degree of forbearance, watch the trends in the industry, the investments, the product and services, and the pricing. I think a lot of careful judgment and careful deliberation was done on the part of NCA.
“Ten years ago, the space was basically void. It was just one piece and one segment and then data now comes on, and we have updated value-added services. So, the regulator had to consider a lot of the issues and I believe they also had to exercise forbearance before taking the decision,” he explained.
At the time Scancom Ghana rebranded Areeba to MTN, the company had a little over 2.5 million subscribers. However, as of March 2020, data from the NCA indicates the company has 23,945,672 subscribers.
At the time, the data market had not moved to mobile phones. Today, MTN data market share is 17,372,290 representing 67.8 % of the market.