Government’s decision to break MTN’s dominance not punishment – Telecoms Expert

Telecoms Analyst, Patrick Boateng, believes government’s decision to provide a level-playing field for all network operators and break the dominance of MTN Ghana in the telecommunications sector is not a punishment.

To him, the move is to create an equal space for all industry players and forestall negative competition.

His call comes after some industry watchers described government’s decision as unfair to the current industry leader, MTN Ghana.

They say the move appears to be one that will punish innovative and successful businesses.

But speaking on the Citi Breakfast Show, Mr Boateng said, “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.”

He explained that the decision is necessary because experiences in other industries have shown that market leaders sometimes tend to “behave in their own interest which may not necessarily be in the interest of consumers or anybody else”.

“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 anticompetitive behaviour. To leave the SMP without acting, consumers will 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 added.

Sharing his view on why the regulator decided to implement the measures after MTN’s over ten-year growth,

Mr. Boateng however, cautioned the NCA to tread cautiously.

“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,” the  Telecoms Analyst added.

Click below to listen to the full interview: 

 

Background

On June 8, 2020, the National Communications Authority announced that it is putting in place specific measures within the telecommunications industry to provide a level-playing field for all network operators and break the dominance of MTN Ghana in the telecommunications sector.

According to the Authority, the growing control of MTN “has impacted negatively on competition and consumer choice, necessitating corrective action,” though it acknowledges the investments MTN has made in their operations over the years.

The Ministry of Communications also said its available data showed that MTN continues to be the dominant player in the telecoms space, having more than double and in some cases quadruple the subscription numbers of its closest rival, a situation government finds troubling.

Rejection of Industry watchers

Following government’s announcement, some industry watchers within the sector have appealed to government to tread cautiously with its plans to implement some policies to limit any market imbalance in that sector.

They also cautioned government not to arbitrarily use regulation against law-abiding businesses.

MTN’s response

In response to government’s decision, MTN Ghana said it respects the NCA’s mandate to regulate the telecommunication sector based on legislation and best practices.

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