Chamber to pay US$ 83m to retain LTE

Members of the Ghana ICT Chamber are prepared to pay government US$83million to keep the LTE business in the hands of indigenous companies, the B&FT sources have revealed.

B&FT sources close to the Chamber can confirm that it (the Chamber) is preparing a proposal to help absorb the US$83million deficit that the Communications minister, Dr. Omane Boamah mentioned during an interview on an Accra-based local FM station yesterday -- in order that the LTE space is retained by local interest.

At the close of the bid last Monday, four companies MTN, ARAB company, Surfline and Gold key, had submitted bids.

This follows controversy over the decision by the National Communications Authority (NCA) to sell LTE spectrum, which is the next-generation ICT technology powering 4G Internet, to Mobile Network Operators (MNOs) that are mostly foreign-owned in the country.

Paul Adom Otchere, Chief Executive Officer of the Chamber told the B&FT: “This next generation of telcos is a most prized asset that the state must keep and retain for indigenous companies only”.

LTE is the next-generation ICT technology powering 4G Internet today. It supports and creates Internet-based applications that make voice crispier and clearer, data transfer faster, and video captured in real time as well as limitless other possibilities.

Currently government has issued three licences to local indigenous companies -- Surfline Communications, Goldkey Telecoms and Blu Telecoms. These have rolled-out or are in the process of rolling-out 3 LTE-based operations, having invested about US$200million.

Government’s offer to these Ghanaian companies was under the 2600 MHz frequency. With the advent of digital migration, the 800 MHz frequency has become available for usage as an LTE platform rendering the same services as the 2600 MHz.

The new 800 MHz system is better, faster and easier to deploy nationwide than the 2600 MHz.

Business and social activities or services will now be faster and better with massive LTE support. Health research will be faster, political governance will be more effective, media activities will be more diverse, and very effective transmission of data and voice will support education.

Government in 2013 promised to reserve the LTE licence and its opportunities to indigenous companies in a strategic step to nurture a Ghanaian-owned LTE industry.

The local companies, on the back of this promise and intent, have raised debt and equity to invest over US$200million in the industry.

As revenue from voice decline and the future growth trend points to data, Mobile Telecom Operators (MTOs) are keen to play a key part in the future data market.

With the 800 MHz -- required to expand nationwide and cheaper to deploy -- now available, government contrary to its promise is opening the frequency up for MTOs, the ICT Chamber said.

“The MTOs have been operating the voice, fixed and mobile broadband band space for the last 20 years. All six telcos are foreign-owned and have generated billions of dollars from their business in Ghana.

“The MTOs’ performance on the 3G space has been dismal with a mere 34% penetration after a decade of operations with low quality of service,” the Chamber said in a statement.

“The Broadband, Fixed and mobile voice line are dominated by foreign companies.

We support the need for foreign investments and participation in the ICT Space, but deem it necessary for Government to also protect and nurture indigenous businesses to become multinationals of tomorrow for Ghana.

“The LTE technology holds the key to creating a Ghanaian-owned ICT industry. As voice is dominated by foreign companies, it is only reasonable and fair for God and country that the Ghanaian is put in the fore of the Data Space. This is a game changer.

“The financial depth and existing subscriber access of the MTOs privileges them to outcompete and collapse the local LTE companies if LTEs are granted to MTOs. This will destroy any dream of having a Ghanaian-owned ICT industry.

“It is wrong and unacceptable for a government to turn its back on a promise that has led to a US$200million investment by its own citizens, to the advantage of foreign companies. What credibility can businesses then attach to government promises?” the Chamber said.

Local LTE companies argue that government should temporarily suspend selling the LTE spectrum to allow them enough time to recover their investment and make decent returns before opening it up to MNOs.