President of Policy Think Tank, Imani Africa, Franklin Cudjoe, has raised concerns about government’s directive to the National Communications Authority (NCA) to address inequalities in market and revenue share in the telecommunications sector.
He said the government is failing to understand that the “business of business is business” and so it is unacceptable for government to try to use the law to appropriate the shares of any company, just to create a level playing field.
“The fundamental misnomer about this issue is that people fail to understand that the business of business is business and if you want to appropriate the shares of a company like MTN you better say so, and not hide behind some old law and suggest that there is some monopoly.
“Allow people to thrive, allow the market to work. This whole idea of importing some antitrust law from the West into our environment unfortunately doesn’t cut”, he remarked.
Mr Cudjoe made these remarks in an interview on Joy News’ ‘Market Place’ programme on Tuesday, June 9, 2020, which was monitored by Ghana Talks Business.
Over the weekend, government directed the National Communications Authority (NCA) to enforce provisions of the Electronic Communications Act, 2008 (Act 775) and the National Telecommunications Policy (NTP) to a level-playing field for all network operators within the industry.
Under the National Telecommunications Policy (NTP), any operator with 40 percent or more market share in voice, data, short messaging service (SMS), and value-added services such as mobile money is considered a significant market power (SMP).
But the Minister of Communications, Ursula Owusu-Ekuful, said that latest reports received from the industry showed a worrying trend that demanded immediate action to correct the growing market imbalance and the creation of a near-monopoly in the industry.
Consequently, NCA has declared SCANCOM Limited (MTN) as an SMP. With this, 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.
MTN currently enjoys almost 75 percent of the telecommunications market share, and according to Mrs Owusu-Ekuful, the directive is to break MTN’s monopoly.
However, Mr Cudjoe, says the manner in which the directive was communicated was not appropriate. In terms of proper governance standards because it did not show respect to the Management of MTN.
He, thus, described the decision to break MTN’s monopoly in the industryasis “vindicative” on the part of the NCA and the Communication Ministry.
He adds that he does not understand why the NCA would want to rely on an old law to punish a company for being innovative and ahead of the market.
Even though MTN has issued a statement saying that they had taken notice of the government’s directive, Mr Cudjoe urged them to further respond in the strongest of terms. He said “If I were running MTN, I would send a scary letter to the government and say wel, I employ a lot of people, I pay taxes and I’m one of the top five revenue contributors in your country”.
In any case, he said, there was a monopoly before MTN ventured into the Ghanaian markets, but with strategic investment they penetrated the industry without any governmental influence.
“We were buying sim cards for almost 130 Ghana cedis at the time and it was just Onetouch [now Vodafone]. Government had shares in it, but it is the government’s own behavior which is responsible for the downward fortunes of Vodafone.
He adds that MTN’s investment strategy has not prevented the other telecommunication companies from making gains in the market.
If government wants to make businesses act socially responsible, he said, it rather ought to ask them and not try to punish them.
Salifu B.B. Moro