Business News Mon, 13 Aug 2012

Vodafone CEO predicts telcos listing on GSE soon

Vodafone Ghana CEO, Kyle Whitehill has predicted that in the next couple of years, telecom operations in Ghana will list on the Ghana Stock Exchange and give Ghanaians the opportunity to share in the telecom wealth.

“Frankly one day what we would love to see is where some of our shares or competitors are listed on the Ghana Stock Exchange...when Ghanaians can then invest into these great telecom companies and get returns through share price increases or dividends – I think that is on the horizon in the next couple of years,” he said.

Kyle Whitehill was speaking in an exclusive interview with Adom News Editor Nii Narku Dowuona on a wide range of industry issues.

He noted that heavy taxes are not the only way Ghana can benefit from the telecom industry, saying that the industry brings value to the economy in many ways, and placement of shares on the GSE is one of the many ways Ghanaians could share in the wealth from the telecom industry.

Kyle Whitehill had predicted some 18 months ago that some telcos in Ghana would eventually merge for survival because six multinational operators in a relatively small market like Ghana, where taxes on the industry are also heavy, would eventually make some players severely unprofitable.

“My argument then was that most markets internationally have two to three mobile operators – the reason for that is it’s hard to build a profitable business with less than 25% market share – so when you have six the implication of that is some operators are not going to make money in the marketplace,” he said.


But Kyle Whitehill said the rate at which the industry is growing now throws his consolidation predictions into doubt, because it seems the operators are likely to stay on longer than he had imagined, adding that offering shares on the stock market looks more of a possible option that consolidations.

This is not the first time a telco boss has hinted about offering shares on the Ghanaian bust.

Former MTN Ghana boss, Brett Goschen hinted, during his outgoing meeting with editors, that MTN was likely to offer shares in the form of private placements after it had finished dealing with a then court case over shareholding.

An official of Tigo Ghana was also recently quoted as saying offering shares to Ghanaians was a possibility even though it is not yet on the table for discussion.

Meanwhile all telecom operators are undertaking austerity measures, which have so far played out in huge budget cuts on branding, downsizing of staff, conversion of permanent staff into contract workers, reduction of staff benefits and several others.


So far, apart from MTN and Tigo, none of the telcos, including Vodafone, is yet positive on annual cash profits after tax; some are barely breaking even as others are actually negative on real cash profits after tax.

Indeed, the Vodafone Group reported a 7.7% dip in revenue mainly attributable to poor performance in Europe, and the inability of its emerging markets operations, like Ghana to make up for the shortfall in Europe.

Telcos in Ghana have expressed concern about unpredictable operational costs, which keeps rising by the day due to ‘sky-rocketing’ cost of power and diesel in particular, plus multiple and ‘arbitrary’ charges by local government agencies and other state institutions.

They have also mentioned that even though mobile subscribers keep increasing, revenue margins keep dwindling because of competition.

All those factors have conspired to push the telcos to the point where, according to Kyle Whitehill, they are likely to go to Ghanaians, through the stock market, for money to run their businesses and also give Ghanaians the opportunity to share in the telecom wealth.

Source: myjoyonline