GT Pays off Malaysians $100m

Government is set to regain 100 per cent ownership of the nation’s biggest telecommunications company as the company is set for a very lucrative privatisation which has attracted the likes of South Africa’s Vodacom, France Telecom, Celltel and UK’s Vodafone.

After an arbitration settlement, government agreed to pay $100 million to Telekom Malaysia and its minority Ghanaian partners in G-Com to buy back their 30 per cent stake in GT, which they paid $38 million for November 1996. More than half of the amount had already been paid by government, with the remainder expected to be settled in time for next year’s privatisation.

But, the interest in GT especially its highly successful mobile network has been heightened by substantial structural improvements made in the last few years which has seen losses of 119 billion cedis in 2002 quickly turned into profits of 114 billion cedis in 2003 (the first full year under the Norwegians).

Since then the company has not looked back with net income increasing by about 350 per cent between 2002 and 2005. One Touch, which claimed a customer base of 850,000 last month (from 78,000 in 2002), is seen as offering one of the best technical services in th mobile telephony today. Yet, government has resisted attempts especially by the Norwegians to slice it off and sell it separately. It recorded its highest monthly revenue ever of 113 billion cedis in November with an impressive net margin of about 85 billion cedis.

However, national discussions on the Telenor management of Ghana Telecom management of Ghana Telecom have been reduced to the salaries of the outgoing Norwegians rather than on whether or not they delivered. They had demanded $400,000 a month for the CEO, yet the GT board only agreed to pay him $15,000 a month which is far less than what most MDs of our local banks earn. The other income earners from Norway were the Chief Technical Officer and the Chief Financial Officer who were on $12,000 and $10,000 a month respectively.

But the GT board was unhappy with what they saw as the Telenor Management Partners’ disregard of the board’s authority. For example, “they were bringing people in on contract without bringing them to the board,” a source said. But in words of a board member of GT, “we must look at the departure of the Norwegians with mixed feelings”. In his words, “Technically, they were excellent and they have been able to turn the company around. But, their management style was not the best. I think they could have done better.”