Business Hilights
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How Ghana used 4G license to drag MTN, others to list on the Exchange

The Ghana National Communications Authority (GNCA) at inception, made it clear in its regulatory requirement that winners of 4G LTE licenses must offload 35 per cent shares in its company to Ghanaians after acquiring the 4G license.

This is expected to be done either via an open public offer or a private placement on the Ghana Stock Exchange, or any other legal means within the next one month.

It has been one year and MTN said it is still going through the regulatory process with the Securities Exchange Commission and the GNCA to make it happen sooner than later.

GNCA is the same body as Nigerian Communications Commission (NCC), the sole regulatory body for activities in telecoms operations in Nigeria.

Though NCC’s provisions did not factor in such business intelligence, there seems to be no special thing to do by any network before rolling out 4G LTE in Nigeria.

Besides, the Vice President, Prof. Yemi Osinbajo recently said that the government will not compel but encourage companies to list on the Exchange to enable Nigerians be part of the ‘cake’.

However, investigations by Business Hilights in Ghana showed that the South African company is currently scouting for partners to jointly roll out 4G in the country.

Almost one year after securing the license, MTN Ghana has started talks with other 4G players in the country for partnerships in order to share assets and liability to reduce costs.

The telecoms market leader was the only company which won one of the two 800MHz spectrum slots at a price of $67.5million on December 2, 2015.

Last year, four companies paid a non-refundable fee of GH¢250,000 each to participate in an auction for those spectrum pair, but the other three did not even show up so MTN became a default winner of one of the spectrums.

MTN deployed the service exactly six months after winning the license, as it promised, and has since spread 4G to all regional capitals across the country and to some key selected towns, with an initial investment of $18 million for 2016 alone.

On the partnership being sought by MTN, the company said it is already talking partnerships with all the Broadband Wireless Access (BWA) license holders who also offer 4G LTE services on the 2600MHz spectrum band.

In commemoration of the first anniversary, MTN said “we are open to partnerships with all interested parties and we continue to engage all BWAs in the best interest of the industry.”

But some telecoms executives have recently hinted that their pursuit of partnerships with BWAs ran into a roadblock because the industry regulator, the National Communications Authority (NCA) is not allowing it.

In response to the challenge, MTN however said “Where there is value in partnering, MTN will seize the opportunity subject to regulatory approval where required.”

There are reasons to believe that the leading BWA licensee, Surfline, had met with the MTN CEO and talked about how they can leverage on each other’s strengths to expand 4G.

Business Hilights further gathered that Surfline and the other BWAs like Blu, Broadband Home (BBH) and Goldkey got their licenses for only $6million each; but they have been struggling for the past four years to expand coverage and to meet the five-year deadline to provide services in 60 per cent of all district capitals.

On coverage and experience, MTN Ghana is assuring existing and potential customers that between 2017 and 2019 it will embark on a steady expansion of 4G across the country to ensure more people have access.

“We have plans to expand the coverage to reach more areas in Ghana to enable our customers experience higher-speed mobile internet on the same mobile phone from which they make and receive voice calls,” the company said.

Just like the 2.6GHz slots recently bought by MTN Nigeria only, our correspondent observed in Ghana that at the time of the 800MHz spectrum auction there was an industry-wide outcry against the $67.5million minimum auction price, but MTN said its business case for the acquisition of the spectrum took into consideration some key factors that made it worth their while.

They said the company’s decision was partly driven by the fact that telecoms worldwide, is moving towards greater data speeds and 4G technology is the next step in that journey to making the lives of customers a whole lot brighter.

Meanwhile, industry experts have always cautioned that 4G devices are not easily affordable in Ghana, so such heavy investment into a 4G network is not the smartest thing to do. The BWAs’ struggle to generate revenue seems to support that assertion.

But MTN said “The revenue projections made for the 4G license provision was not for us to attain Return on Investment (ROI) within a year. It is an ongoing process and in line with our long term digital strategy.”

The company said it is also working with device manufacturers and distributors to source affordable 4G devices to make it easy for many more Ghanaians to access 4G LTE services.

“Subscribers replacing their legacy devices (handsets and others) to 4G compatible type is also very key to the expansion of 4G across country,” it added.

It is important to note that MTN is currently in partnership with handset dealers like Mobile Zone and i2 through which they are churning out relatively affordable 4G brands from Tecno and Huawei among others to boost uptake.

MTN said it so far does not see any immediately recognizable bottlenecks on the regulatory front so Ghanaians can rest assured that its 4G expansion will continue until it is available everywhere.

It is also promising to introduce more innovative services that will support the growth of businesses and ultimately boosting national development, and also make video services, which require high-speed bandwidth available, and accessible to all.