I am compelled to respond to the unsigned presser released by the National Communication Authority in response to recent comments on X (Twitter) by telecom consumers who have grown frustrated with the constantly increasing prices of telecom services. Subscribers are calling out the National Communications Authority for its inability to resolve MTN’s market dominance effectively in the wake of the increasing prices of telecommunication products. The open display of subscriber dissatisfaction is justified, given the NCA had three years to deal with this issue but failed. The recent avalanche of posts under 3 distinct hashtags on X (Twitter) speaks directly to the constant increase in the prices of telecommunication products, particularly mobile internet (data) services, which could be traced back to the NCA’s directive prohibiting MTN from selling its services cheaper than non-dominant players in the market. I will attempt to unpack the relative matters under two broad topics so that they are easily understood by all readers.

Expectation of Customer Turnover (Churn)

The NCA’s price control directive was projected to increase customer turnover to AT and Telecel (formerly Vodafone), as subscribers were expected to switch from MTN’s relatively higher fees. Having tracked this matter closely from the beginning, I can unequivocally state that this approach to dealing with the dominance issue was stillborn and failed. It will only leave MTN as a permanently dominant player in the long run, one that will ‘forever’ be subject to ineffective directives unless something innovative is done, and soon. If this matter is not addressed, prices may rise much more, eroding customer confidence and investor appetite in Ghana’s telecoms sector. It is an open secret that customer service, quality of service, and innovation have deteriorated in the last three years under this NCA Board more than any other period in our telecom history, and the sooner the regulator wakes up to smell the coffee, the better it will be for the industry.

Self Sabotage: Whether through deliberate action or lack of competence, the NCA has sabotaged itself by working against the foundations that will allow subscribers to easily and comfortably transition from the dominant player (MTN) to one of the two financially distressed alternatives (AT and Telecel (then Vodafone)). One cannot set up a strategy to induce churn while deliberately preventing it from taking effect. Here are two examples of self-sabotage: 

i. While establishing a price floor for MTN (below which it cannot sell), basic pricing economics requires that reasonable price ceilings be established for AT and Telecel (above which they cannot sell), after all they are direct beneficiaries of the directive to MTN and their negative actions could have unintended outcomes on that directive. This would not only have ensured the common good and subscriber satisfaction/acceptance, but it would also have prevented AT and Telecel from price-fixing, and MTN from price-matching when their competitors raise prices. The NCA failed to manage their price-control mechanism, and unless they present rational and quantifiable answers, we can only (mis)interpret their actions.

ii. The NCA discreetly banned mobile number portability around the same time it imposed price controls on MTN. There was no public announcement, even though the policy had been thoroughly thought out and executed years earlier with public funds. Mobile number portability allows consumers to keep their mobile phone numbers while migrating from one service provider to another. Many, including me, have been surprised by the reasons behind the service suspension, especially if the NCA’s true objective is to lower MTN’s dominance (market share) with all of the concerns that it raises.

Solutions: The only way the NCA can mitigate the factors blocking its remedies to achieve traction in the dominance fight are follows; 

  1. Engage MTN from the perspective of a partner interested in its growth per section 20 (10) of Act 775 and Section 5 (a)) of 769 which prescribes dialogue between the regulator and a subject for SMP classification to agree quick-wins.
  2. Review the price control directives and establish realistic pricing floors (for MTN) and ceilings (for AT and Telecel) to benefit all stakeholders and reduce price volatility,
  3. Ensure that MTN, AT, and Telecel strictly implement the “90 day inactivity (recycling) rule,” which states that all phone numbers that remain unregistered or inactive for 90 days will be quarantined or deactivated.
  4. Restore mobile number portability as a matter of urgency so that the numerous Ghanaians who want to port can exercise their right.
  5. Set up a Number Portability Clearinghouse to handle known and emerging challenges with the procedure; this will ensure that porting to MTN remains on hold during its market dominance period.

Level playing field

One would have expected the NCA and its overseeing ministry to prioritize levelling the playing field to encourage competition in a variety of ways that help AT and Telecel gain consumer trust by improving service quality and customer service. The NCA has all of the tools it needs to support and also hold telecom businesses accountable while engaging them on their deficiencies to help them grow and compete more effectively. A level playing field must also welcome new entrants who can disrupt the market, yet the Authority has closed the only route into the telecom sector for local entrepreneurs by unilaterally suspending MVNO licenses. MVNOs are telecommunications firms that do not own infrastructure and instead rely on MNOs such as MTN, AT, and Telecel to provide their services to subscribers.

The NCA has over the recent past, concentrated on holding skewed public engagements which have not provided any positive impact because they have failed to engage the relevant industry groups that have the insights to support the market with ideas for growth that will support the establishment of stronger brands.

Self-sabotage: In my opinion, the NCA has sabotaged itself yet again while deviating from its core mandate as outlined in the Act of Parliament (law) that established it. This is what I am referring to;

i. The NCA has stopped reviewing quality of service and customer experience metrics that will assist players in improving; if there is any, it lacks transparency. Many industry watchers believe that there are backdoor deliberations taking place to make concerned parties comfortable at the expense of the industry.

ii. There is no better way to improve competition than through disruption; the suspension of MVNO licensing without public consultation has kept the telecom sector stagnant. Customers have lost the ability to advocate for market-driven or demand-driven innovations, therefore they are compelled to accept any service the market offers, not to talk about blocking employment opportunities for a fraction of the 2 million unemployed youth.

Remedy: If the NCA truly intends to regulate the sector by increasing competition and innovation, it will focus on the following remedies:

  1. Pursue the collection and regular publication of customer service and quality measurements to compel industry actors to meet expectations and earn public trust.
  2. Restore the MVNO license regime and encourage local enterprises to enter the market by lowering or eliminating recognized hurdles to entry.
  3. Engage the Telecoms Chamber in an effort to eliminate interconnect charges, which will result in increased competition and innovation, and encourage new market entrants.
  4. Regularly engage other stakeholders in the telecom value-chain, like the GISPA, WASPAG, ICT Chamber and others as the “industry forum” as provided by law.
  5. Pursue an industry-driven 5G deployment paradigm with all participants engaged and participating rather than a Ministry-driven take-it-or-leave-it implementation, which risks becoming more expensive and externally controlled.

Beyond these, the Ministry must as a matter of urgency look into reviewing and consolidating all our ‘outmoded’ Acts that govern the electronic communications space, with reference to all those that were passed in 2008 – Acts 769, 771, 772 and 775.

It must also start working on policies for telecommunications, broadband/internet & net neutrality, and spectrum management. I will dedicate a write-up to these policies and their importance hopefully soon.

It is becoming increasingly evident, with the empty press release from the NCA, that their focus is neither to serve the interest of “we the people“ nor the interest of the telecommunications market. I wonder whose interest is it they are serving, because the government will still get its due anyway.

How can we trust a self-sabotaging regulator who admits it cannot deal with a regulatory matter under its purview?

More anon…