Ghana Telecom's monopoly over land based communications came to an end yesterday with the announcement by Felix Owusu-Adjapong, the Minister for Communications and Technology, that prospective operators could begin to apply for licences, and that the government would also listen to offers for its shareholding in GT itself. At the same time, it was announced that Malaysia Telekom's control over GT is to end, as the Technical and Consultancy Services Agreement will not be renewed, although a three month grace period was granted to ensure an effective handover.
In a press conference at the Ministry of Information yesterday, Mr. Owusu-Adjapong stated that, "exclusivity in Ghana is deemed to have come to an end as at the close of work on the 19th February 2002. This means that Government will encourage fair competition in the Telecom Sector." The announcement does not come as a huge surprise. Back in December, the Minister had criticized the structure of the set-up with TM, because it gave "absolute management control to the minority shareholder," and because TM "has not brought even a cent as working capital to Ghana Telecom."
On this basis, the government had refused to sanction a $100million loan from the International Finance Corporation (IFC) to Ghana Telecom, and entered into discussions with TM on how to renegotiate the Technical and Consultancy Services Agreement, which was due to expire on Tuesday.
In these discussions, which included a visit to the President, TM has clearly been unable to convince the government of the benefits of the arrangement. As a result, not only has the sector been thrown open to the market, but the board membership changed to reflect in the shareholding - the government, which owns seventy percent of GT, now has six members to TM's three.
The one success Telekom Malaysia achieved was to secure for itself a three month stay of execution as overall managers of GT. Mr. Owusu-Adjapong, though, did stress to the gathered journalists that these three months would serve purely as a transition period to ensure an effective handover, and that "any such future management contract" would be geared towards achieving far greater "accountability and performance".
Prospective operators have been invited to apply for licences from the National Communications Authority (NCA), which itself is to be "strengthened to perform its expected role as the Sector Regulator." Future investors in Ghana Telecom, said Mr. Owusu-Adjapong, would need to show resources sufficient to develop a minimum of 400,000 fixed lines, and be able to prove "to the satisfaction of all us of that it possesses the requisite know-how to deliver our needs adequately."
The Minister wouldn't be drawn on what kind of price the government has in mind for its GT shares; nor would he reveal how many of the shares the government would be prepared to sell. Mr. Owusu-Adjapong simply referred to his previous experience in such business transactions, promising to get the best deal possible "for the good people of Ghana."
Telekom Malaysia was granted control of GT in 1997 as the leader of a consortium that called itself G-Com, on the basis that it would provide the expertise necessary to expand Ghana's land based communications network. It was also granted market monopoly in order to help it achieve this. President Kufuor, though, has pledged to provide broadband telephone connections to every town in Ghana with a Senior Secondary School or Teacher Training College, as part of his general blueprint to forge a 'Golden Age of Business' in Ghana.
The belief has obviously taken hold in the offices of the Department of Communications and Technology that such an advance was unlikely under the guidance of TM. Officials now believe, though, that this aim can be achieved in two to three years with the added incentives that free competition can provide.
Ghana Telecom and the mobile telephone companies operating in Ghana have been a source of great frustration to Ghanaians especially the business community. It is extremely frustrating to try to use mobile phones in Ghana to transact business. It is not only difficult to get connected but the line keeps cutting.
With the confusion over GT having been settled, the government would have to turn its attention to the mobile phone operators, especially Mobitel, which started off with many frequencies that were handed to it on a silver platter by the former government.
The government's decision on GT yesterday, finally puts to rest months of speculation on what it intended to do with that strategic sector. The speculations were so soured that the local union issued a statement attacking the Minister for what it thought was bad faith on the part of the Minister. The Accra Daily Mail carried the full text of the union's statement in its edition of Monday November 26, 2001. Even more ominous, at times it seemed like it would affect the relationship between Ghana and Malaysia. Now, the onus is squarely on the government to improve telephone services in the country for it has taken a far-reaching decision, with great electoral consequences. With just over two years left for Election 2004, the government cannot afford to go into the elections with "All circuits to the area you are calling are busy", for that would be extremely costly.
Ghana Telecom's monopoly over land based communications came to an end yesterday with the announcement by Felix Owusu-Adjapong, the Minister for Communications and Technology, that prospective operators could begin to apply for licences, and that the government would also listen to offers for its shareholding in GT itself. At the same time, it was announced that Malaysia Telekom's control over GT is to end, as the Technical and Consultancy Services Agreement will not be renewed, although a three month grace period was granted to ensure an effective handover.
In a press conference at the Ministry of Information yesterday, Mr. Owusu-Adjapong stated that, "exclusivity in Ghana is deemed to have come to an end as at the close of work on the 19th February 2002. This means that Government will encourage fair competition in the Telecom Sector." The announcement does not come as a huge surprise. Back in December, the Minister had criticized the structure of the set-up with TM, because it gave "absolute management control to the minority shareholder," and because TM "has not brought even a cent as working capital to Ghana Telecom."
On this basis, the government had refused to sanction a $100million loan from the International Finance Corporation (IFC) to Ghana Telecom, and entered into discussions with TM on how to renegotiate the Technical and Consultancy Services Agreement, which was due to expire on Tuesday.
In these discussions, which included a visit to the President, TM has clearly been unable to convince the government of the benefits of the arrangement. As a result, not only has the sector been thrown open to the market, but the board membership changed to reflect in the shareholding - the government, which owns seventy percent of GT, now has six members to TM's three.
The one success Telekom Malaysia achieved was to secure for itself a three month stay of execution as overall managers of GT. Mr. Owusu-Adjapong, though, did stress to the gathered journalists that these three months would serve purely as a transition period to ensure an effective handover, and that "any such future management contract" would be geared towards achieving far greater "accountability and performance".
Prospective operators have been invited to apply for licences from the National Communications Authority (NCA), which itself is to be "strengthened to perform its expected role as the Sector Regulator." Future investors in Ghana Telecom, said Mr. Owusu-Adjapong, would need to show resources sufficient to develop a minimum of 400,000 fixed lines, and be able to prove "to the satisfaction of all us of that it possesses the requisite know-how to deliver our needs adequately."
The Minister wouldn't be drawn on what kind of price the government has in mind for its GT shares; nor would he reveal how many of the shares the government would be prepared to sell. Mr. Owusu-Adjapong simply referred to his previous experience in such business transactions, promising to get the best deal possible "for the good people of Ghana."
Telekom Malaysia was granted control of GT in 1997 as the leader of a consortium that called itself G-Com, on the basis that it would provide the expertise necessary to expand Ghana's land based communications network. It was also granted market monopoly in order to help it achieve this. President Kufuor, though, has pledged to provide broadband telephone connections to every town in Ghana with a Senior Secondary School or Teacher Training College, as part of his general blueprint to forge a 'Golden Age of Business' in Ghana.
The belief has obviously taken hold in the offices of the Department of Communications and Technology that such an advance was unlikely under the guidance of TM. Officials now believe, though, that this aim can be achieved in two to three years with the added incentives that free competition can provide.
Ghana Telecom and the mobile telephone companies operating in Ghana have been a source of great frustration to Ghanaians especially the business community. It is extremely frustrating to try to use mobile phones in Ghana to transact business. It is not only difficult to get connected but the line keeps cutting.
With the confusion over GT having been settled, the government would have to turn its attention to the mobile phone operators, especially Mobitel, which started off with many frequencies that were handed to it on a silver platter by the former government.
The government's decision on GT yesterday, finally puts to rest months of speculation on what it intended to do with that strategic sector. The speculations were so soured that the local union issued a statement attacking the Minister for what it thought was bad faith on the part of the Minister. The Accra Daily Mail carried the full text of the union's statement in its edition of Monday November 26, 2001. Even more ominous, at times it seemed like it would affect the relationship between Ghana and Malaysia. Now, the onus is squarely on the government to improve telephone services in the country for it has taken a far-reaching decision, with great electoral consequences. With just over two years left for Election 2004, the government cannot afford to go into the elections with "All circuits to the area you are calling are busy", for that would be extremely costly.
