Your telecom cost in 2022 will be more expensive by 25% more. Well that’s if you’re on MTN.
And in very plain and maybe outstretched terms… it’s because the government wants to save AirtelTigo and Vodafone.
So this is how it all happened. In June 2020, the government declared MTN Ghana as an SMP(Significant Market Player) meaning that it had adjudged MTN Ghana as crossing the 40% market share requirement and becoming overly dominant in the telecom market.
The declaration as per what MTN declared on its website “essentially means that special regulatory restrictions would be enforced to potentially limit the company’s growth, performance, innovativeness and its competitiveness in the telecoms market.”
As at the time of declaration MTN had a chokehold on the telecoms sector across all markets. They had a voice market share of over 70%, mobile data >70%, mobile money Revenue market share > 90% and a rapidly growing Fixed Broadband market share.
MTN sought to appeal the declaration and actually went ahead to the courts. As said earlier, the aim of the declaration was to curtail their growth by forcing them to be less competitive and they wouldn’t have that.
After a back and forth with the courts and other stakeholder meetings an agreement was reached on what the next few steps. Simply put, again in very plain terms, it was decided to make MTN more expensive to the Ghanaian user such that they would leave and use Tigo and Vodafone.
It was to start on Voice calls then later Data. MoMo is regulated by the BoG hence, NCA couldn’t regulate it as such. So somewhere late last year remember how your Pulse or Mashup minutes magically reduced by nearly half?
I’d love to explain the mechanics of the voice onnet/Xnet costs and it’s bearing on interconnect charges and why 50% reduction… but you’ll skip this thread so I’ll leave that for later. But as seen, the idea is to make you leave MTN Mashup for Vodafone Red or AirtelTigo Fuse
Now, it’s data that’s been targeted. Fixed Mobile Data or what you’ll call the Turbonet data. It’s price has been increased by 50% . As per @StatsGH.
Based on the phase approach to the implementation of the SMP intervention, your mobile data will be targeted next.
So what am I saying. I’m simply saying that the NCA is interfering in the free market by altering the dynamics of supply and demand to cause price hikes. I think the motive of driving competition is great but the mitigation approach may not be the best.
Telecom product switch and its price is very inelastic. People are not as price sensitive to telecom products as believed. In earlier years, price was a key factor in telecoms however in recent years, quality of service has become the main switching factor.
This is my alternative. If the NCA wants to foster competition without hurting the customer I think they could fund these other telcos or allow shared services of MTN’s infrastructure by these other telcos. In that case everyone wins and the consumer doesn’t suffer.
Other than that. MTN cannot be blamed for investing smart, being innovative and being everywhere you go.
PS. This would actually make MTN more money as they most users won’t switch but just spend more on MTN.
By: Row Skilli-Vitzky (@Rowdvitzky on Twitter)