Deputy Director of the Engineering Division of the NCA, Edmund Yirenkyi Fianko, in an interview with Asaase Business AM Monday said “…Several engagements are currently ongoing between the regulator[NCA] and the SMP and the other players in the market, which is supposed to fine-tune the specific measures that we are putting in place to address the things we observe or we identify as potential risks to competition.”
Government, through the ministry of communications, directed the NCA to enforce the provisions of the Electronic Communications (EC) Act 2008 and National Telecommunications Policy to address glaring disparities in market share and revenue share in the telecommunication sector.
This Policy Directive is motivated by evidence of a growing market imbalance and creation of a near-monopoly in the telecom sector, Ursula Owusu-Ekuful, the Communications Minister said in a press release.
The ministry of communications said MTN’s 75% market share represented “glaring disparities” and unhealthy competition.
Three other telcos, AirtelTigo, Vodafone and Glo, scrabble over 25% market share.
Edmund Yirenkye Fianko said “the decision by the NCA affects MTN and not the entire company but certain relevant markets. So in the market of mobile voice, mobile data, MTN is considered a Significant Market Power (SMP), but there are other segments of the business which are not affected by this decision.”
What is SMP?
Section 20 of the Electronic Communications Act of 2008, Act775 says the NCA may classify a network operator or service provider as dominant, if individually or jointly with others that network operator or service enjoys a position of economic strength that enables you to behave to an appreciable extent independently of competitors and users.
In other words, an operator which can take certain actions especially related to pricing, which cannot be replicated by other players in the same market segment has significant power in the market.
“So in the marketplace, you have operator, all of them were licensed, the same time maybe a few years in interval and they’ve all played and when you find that one particular player becomes dominant by way of market share in terms of the size of the market, by the control in the number of subscribers and also the value of the market that they control, you would want to watch what the economists will call ex-ante regulation, you have not said that they have done something wrong, but then they have reached a certain point where they have the capacity and the ability to take actions that the others in the market cannot replicate, they cannot do same.
“Meaning that they can outcompete them and if they so choose can drive these guys out of business but you don’t wait for that to happen,” Yirenkye Fianko said.
Monopoly?
He said “So you see that a particular player has the capacity to be able to take certain actions which could be inimical to the survival of the others…we are not saying that it is a monopoly, but we are saying that they have reached a certain point where they can behave like one if they wish.
The NCA says this is not the first time it has addressed glaring disparities in market share and revenue share in the telecommunication sector.
“It’s not the first time we are declaring an entity SMP, in fact, in 2005, the policy initially declared GT of Ghana Telecom at the time as a Significant Market Power in two areas; in the fixed voice telephony market and also in the international IP transit route, as in at a time we only have Safari, that was the only undersea cable that existed in Ghana. And that represented a bottleneck for competition.
“At the time, the NCA decided to liberalize so that we could allow other entities to come into that space to break their monopoly…Today, we have several undersea fibre cables coming into Ghana, and it has significantly driven down the cost of internet access,” he added.
Investments
Rev. Yirenkye Fianko said the decision by the NCA is to help the other telecom operators to scale up “so we expect this to encourage, investments in smaller entities and this is a testament of MTN’s success.
“The objective is not to weaken MTN all we are trying to do is to prevent the death of the others that is what we are trying to do it is not so the measure is not targeted at hitting MTN, it is a measure targeted at creating the space for the others to also, you know, for want of a better expression breath so that they can also have a lease of life.
“So we are working to fine-tune everything, make sure that the corrections that we are seeking are what we will achieve at the end of the day, and also to protect the interests of the consumers.”
He added, “…but I will hold back from making any announcements until such time that all these engagements have been concluded. And then we will inform the public.”
Mechanisms to check market share
Rev. Yirenkye Fianko said the regulator takes monthly data from all the industry players and analyse them. “we look at them[data] and we look at the trends; monthly, quarterly and annually.”
He added, “So, it is in looking at all this and the other indicators; we monitor pricing, we monitor the behaviour of the various players. So we put all these metrics together. To conclude whether or not an action is necessary.”
