Telcos chase ISPs out of business

The National Communication Authority (NCA) has advised Internet Service Providers (ISP) to change their business model to guarantee their stay in business in the years ahead.

Over the years, ISPs have provided Internet services to homes and offices at a fee; but the proliferation of mobile phone network operators and new technologies have taken the ISP business to the brink of collapse.

“ISPs need to look at their business model. It is not the same. Business models change and these people (ISPs) must change accordingly,” the Director of Regulatory Administration, Joshua Peprah, told the B&FT in an interview in Accra.

“The ISPs need to integrate themselves into the telecom network operators and offer services to them because now we are moving from voice to data. They should find a way to get an agreement with the network operators so that they can enhance the data business side of the telcos, since they have the spectrum. If an ISP wants to buy its own 2.6 frequency spectrum for about US$5million that is fine,” he said.

Ghana, which was the first country in sub-Saharan Africa to engage in ISP business in 1993, has over the years witnessed the demise of pioneer Internet entrepreneurs -- most of whom have moved to other, newer, technology-driven ventures. And those still in business have seen the profitability and sustainability of their businesses weaken year-on-year.

Currently, there are about 149 licenced ISPs in Ghana. However, only about 30 are in operation. And out of the number of ISPs in operation, less than 10 of them are fully-owned by Ghanaians.

Additionally, the topmost players in providing Internet access to homes are the biggest telephony firms in the country who serve both as wholesaler and retailer of international bandwidth.

More so, some of the telcos have gone past the playing turf of ISPs to invest in Cyber Cafes throughout the country -- a move ISPs have described as threatening, unfair and anti-competitive.

According to the ISPs, lack of regulation in Internet business in the country is the principal threat to the ISP business in the country.

However, NCA has said that the allegations and accusations against the national telecom regulator are misplaced, mishit and misfired as the national interest of the country far outweighs the individual interest of businesses.

Mr. Peprah cited agitations in the early years of de-regulation in the telecom sector against the posture of the regulator concerning ISP business in the country.

He recounted that: “When mobile phones first came, there was an association called the Pay-phone Association which advocated that the NCA stop licencing mobile phone network operators as patronage to pay-phones dwindled.

“So pay-phones kept dying and the Association disappeared. And the result is that access to communication services, especially mobile phones, has increased exponentially.

“The regulator is not here to protect a particular type of business; be it indigenous or foreign. We just want quality and efficient service to the people.

“There are destructive technologies and that is the nature of the business. If you don’t understand it, then you are in the wrong business. So for ISPs to cry for protection, then something is wrong. The regulator doesn’t give this kind of protection.

“So if you (ISPs) want to be in this business, you have to be ready and know how you can metamorphose with the technologies as time goes on, and make proper alliances and arrangements so you can remain relevant,” he said.