I don’t even know how to start this write up – whether from the angle of MTN becoming a platform player in the face of telecom regulations, or from the spinelessness of our industry regulator in the face of the bigger digital platforms like TikTok, Facebook, Twitter, Google, YouTube, Instagram and the rest?
Okay, let’s begin from home.
For starters, let’s state that no telco in Ghana can be faulted for strategizing to grow. It is up to the regulator to also grow and stay in a position to properly and effectively fulfil its mandate.
MTN is SMP
In June 2020, government finally decided to name MTN Ghana a significant market power (SMP). Simply put, it is a regulatory measure to, as it were, correct the imbalance in the market by controlling the growth of the dominant player(s) in a way that allows the smaller players to catch up.
Indeed, the Minister of Communication and Digitalization, Ursula Owusu-Ekuful laid out the basis for that measure saying that MTN had controlled more than 75% of the total telecoms market – voice, data, mobile money and revenue for many years, and it was time for the regulator to step in. Well, better late than never, because the law says 40% market share over a period was enough to name a player SMP, and MTN had by then held way more than 40% for more than 15 years.
So, the National Communication Authority (NCA) has since been working with MTN to implement a number of measures geared towards ensuring that the smaller players can also compete. For instance, MTN has been compelled to make all on-net and off-net rates uniform so that communication between two MTN customers will not be cheaper than communication between an MTN customer and the customer of another network.
Again, the interconnect fees MTN charges from other telcos has been reduced by 30%, while MTN is also being compelled to roll out national roaming arrangements with all the other telcos so that when the customers of the other telcos get to locations where their networks don’t have coverage, they can get connection via MTN. But that is not necessarily free of charge to the other telcos.
There are other measures, all geared towards a charge the Minister of Communications gave to MTN at the launch of their 25th Anniversary – that MTN should take advantage of their SMP status and become a Network as a Service (NaaS) so that they can carry the entire ecosystem along the path of growth.
Vintage MTN, even though the SMP interventions were essentially designed to ‘curtail’ its growth and allow other telcos catch up, MTN does not seem to have been affected in anyway by those interventions and has since been growing subscriber base and market share as if nothing happened. On the contrary, the very telcos which are to benefit from the brakes being pulled on MTN’s growth, keep losing subscribers and market share.
Below is an extract from the NCA’s subscriber base figures for telcos in the first quarter of 2022. It clearly shows that Vodafone and AirtelTigo have been losing subscribers consistently month after month over the entire quarter, while MTN kept adding on subscribers, in spite of the NCA’s SMP corrective measures.
Even in the most recent subscriber numbers published by the NCA for the month of June 2022, MTN’s subscriber base grew by 0.42% over that of May, shooting its total market share up to 63.06%. Again, its data customer base also shot up to 72.16% within that same one-month period. Meanwhile, Vodafone and AirtelTigo continued in their losing ways. All this is happening in spite of NCA’s supposed regulatory intervention to correct the imbalance in the market.
Botched 5G plans
MTN planned to launch 5G network in Ghana this year. They actually provisioned over 1,300 cell sites across the country for the purpose. But those plans have been suspended for reasons the MTN Ghana CEO, Selorm Adadevoh did not quite state. But Techgh24 gathered from some independent industry persons that as part of the SMP measures to curtail MTN advantage in the market, the regulator has simply refused to grant MTN any more spectrum to roll out its 5G network as planned. This shortchanges the public, but it is a desperate measure by a regulator who is totally at a loss on how to control an operator obviously outgrowing its regulations.
Already, MTN is giving the other players a sound whipping in the 4G space, wielding an overwhelming portion of the 4G spectrum it acquired directly from NCA and also from another 4G licensee, Goldkey Telecoms, which was unable to roll out its network. Vodafone holds far less than half the 4G spectrum MTN has, and AirtelTigo has absolutely none.
Unfair Tower Co-location
Added to the fact that MTN holds sway over competition in terms of superior spectrum volumes, the current tower co-location arrangements in the country favours MTN more than any other telco, and the other players are actually suffocating under huge tower costs, while MTN keeps riding comfortably. The full story on that can be read here and here.
But in brief, MTN maintains a lease-back agreement with ATC Ghana, the company which owns and runs over 80% of co-location towers and over 60% of all telecom towers in the country. The lease-back agreement stems from the fact that ATC Ghana acquired majority of those towers from MTN and is therefore obligated to give MTN some advantage in terms of access to those towers. Moreover, a lot of the MTN staff who used to manage those towers in-house, have now crossed over to ATC Ghana, so they maintain a certain loyalty to their former paymasters in a way that shortchanges other operators.
Lease-back agreements are not illegal, they happen in many jurisdictions. But regulators have a duty to ensure that when they happen, they don’t shortchange smaller operators and their consumers. For instance, in South Africa, when MTN sold its towers to IHS Towers, the industry regulator spelt out clear anti-competitive condition to thwart any arrangements that could be inimical to other players. But unfortunately, our regulator is just doing nothing about what is happening in Ghan, and other industry players are being suffocated by it.
Telecom experts have said that the real factor that fuels MTN’s dominance in the market is the tower co-location arrangement and its attendant lease-back agreements, because that it where the crux of the matter is, in terms of network availability and network quality. So, for the experts, it is pretentious on the part of the regulator to have turned a blind eye on that, while purporting to be correcting the imbalance in the market through some cosmetic measures.
For instance, as part of the SMP corrective measures, MTN and Vodafone are piloting national roaming in the Volta Region. Techgh24 has just recently learnt that, that arrangement, which was intended to help the smaller player like Vodafone, is rather costing them heavily because more of their customers use MTN network and that means they have to pay more fees to MTN. The regulator is not paying attention to that.
We are also aware that AirtelTigo and the biggest BWA player, Surfline owes ATC Ghana millions of dollars, and they are unable to pay because they are simply not making enough money like MTN is. Glo walked away from the co-location arrangement for the same reasons – suffocating tower cost.
Experts also think one key SMP intervention that will show the regulator is really serious about bridging the market gap is to stop MTN from selling SIM cards for a while. That, however, would be little extreme because it would unfairly limit the choices the public has in terms of which network they prefer. Moreover, because of mobile number portability (MNP), people can still buy SIM cards of another network and port to MTN if they so prefer.
In the midst of all this, MTN Ghana is rolling out the group’s Agenda 2025 strategy, starting with a plan to become a complete Digital Operator by 2023 and then move on to become a platform player in 2025.
This whole agenda will turn MTN into another animal that our regulator does not seem to have what it takes to control. The MTN Ghana CEO, Selorm Adadevoh himself stated that, per the ‘Agenda 2025’ strategy, MTN is moving away from being a telco to become a TECHCO (technology company). Our industry regulations are designed to regulate telcos and not TECHCOs. Obviously, MTN is outgrowing the regulator/regulation, and our regulator seems oblivious about how to handle that.
Essentially, being a techco means MTN is no longer just your regular telecoms service providers, but rather a PLATFORM PLAYER, where individuals and organizations, including even other telcos, can connect and provide services to their own set of clients and customers outside of MTN, on a revenue share basis with MTN. Bottom line, MTN is going to become like one of global digital platforms players like Facebook, Google, Amazon, Alibaba, TikTok, Pinterest, Apple, WeChat, name them. In fact, the MTN Group has said that it is going to become Africa’s WeChat plus more.
The ‘Agenda 2025’ strategy is really deep, but it hinges on five main pillars – Digital Services (Ayoba), Fintech Solutions (Mobile Money), Enterprise Services, API Marketplace (Chenosis) and even more importantly NaaS (network as a service). The NaaS bit sits well with the Minister’s call on MTN to use its SMP status to carry along the entire ecosystem on the path of growth.
So, it would appear that while the SMP status and regulatory measures were designed to help other telcos catch with MTN, the latter has rather skilfully absorbed those measures into its Agenda 2025 strategy and is riding on them to push ahead of competition faster, while the players who are supposed to be benefitting from those measures rather keep losing subscribers, market share, and also keep suffocating under tower cost.
It is obvious that our regulator and our government don’t know how to handle MTN. They tried SMP and it is not working. Now they have refused to grant MTN spectrum to roll out their 5G network. The government’s next move is to merge all of MTN’s three competitors – AirtelTigo (itself a merger of Airtel and Tigo), Glo and Vodafone to create something a bit closer to competition for MTN. Already, Glo customers have been migrated to AirtelTigo and plans are afoot to add Vodafone to the number to create a duopoly in the telecoms market.
MTN currently holds 63% plus of the voice market, and over 72% of data market. So, a combination of all three of its competitors will still leave the new competitor with around 37% voice market share and less than 28% of the data market. It makes one wonder whether creating another animal to fight MTN is really the way to go. The other reason is that MTN is no more the animal our regulators knew. MTN is fast becoming a Platform Player, a Techco.
In Ghana, regulation for platforms is completely non-existent and MTN is becoming one. Even at this stage, their regulatory and sometimes propagandist interventions to control MTN has failed woefully. Various platform players like the social media platforms have been operating into Ghana for decades and influencing our way of life, but our regulator seem completely out of touch with how to protect our interest on those platforms.
Elsewhere, the tech giants are properly regulated in the interest of the people. Europe, for instance, has very strict regulations for digital platforms. Recently in Nigeria, the government has asked all those platforms to open offices in the country to make themselves available for regulation. In Ghana, these platforms are allowed to do what they want – push the content they want to Ghana, breach our privacy at will and the regulator just sits by and looks on; at best, our regulator is busily chasing telcos around for fines, fees and surtaxes with regard to their 2G, 3G and 4G operations. Twitter is now in Ghana, and our government official are happy to make propagandist noise with it. But as to what exactly the benefits are to us is another question which remains unanswered. For one, Twitter is now advertising in Ghana, but Ghana has no access to advertise on Twitter.
Our regulator needs to wake up quickly to the reality of MTN Ghana’s transformation from a telco to a TECHCO – a Platform Player that is not your usual telecoms services provider but a platform where others can connect and do business and provide all kinds of services that need skilfully crafted regulations to properly manage in the interest of the country.
In closing, let me restate that no one can fault MTN or any operator for strategizing to grow, but our regulator must also grow and ensure that no operator outgrows its mandate.
We leave it here.