Why Ghana Telecom Must Not Be Sold

*Why Ghana Telecom Must Not Be Sold (I/2)***

*By E.K.Bensah II*

Whether the sale and purchase agreement of 70% of the state-owned Ghana Telecom is ratified by Parliament or not, the agitation around it will remain in the minds of Ghanaians for years to come. In my view, it will remain a test-case of *how* *not* to sell a strategic public asset without consultation of the people.

Even if it might appear tardy, there are many Ghanaians who are cottoning on to the fact that a major strategic asset is being divested -- and that they might not like it. Were you to scan the horizon of the past fortnight, it would be fair to say that the private media has largely done a commendable job in sensitising Ghanaians about this most important of sales. From CITI FM through Radio Gold and Joy FM to Uniiq FM, the sale has exercised quite a number of people. I would like to offer my most robust submission yet devoid of the rationale associated with scientific and "empirical" thought.

*It is Ghanaian*

Ghana Telecom was a wing of the then Post & Telecommunications (P&T) Corporation that was established after World War II. Until then, P & T was a department of the Ghana Civil service under the supervision of the Public Works Department (P.W.D). Established as Ghana Telecom in June 1995 after it was incorporated as a successor to the telecommunications division of the then P&T, it has gone through vagaries of change--including even a logo change around 2005 --to reflect how it would sit at the cusp of major changes in the telecommunications sector.

*We have been burned before*

It is true that this government is not the first to have initiated the privatisation of the company. Indeed, in 1997, Telecom Malaysia Berhard bought some thirty percent of its shares, with the government retaining the rest. The Malaysians sat as both management and board members. Failing to reach targets during their five-year tenure, they were jettisoned by this same administration, only to bring in Norway's Telenor. Regrettably, the efficiency generally associated with this Scandinavian country did not translate into their management of Ghana Telecom, even as they sat in their capacity as management and not share-holders. In December 2006, they were kicked out by the government.

Even when Ghana had rejected the Malaysians and the Norwegians in effectively managing and "looking after" GT, what makes us so sure that the British-based Vodafone (with South African influence) will do better? Must we yet be roasted at the altar of a theoretical capital injection of a $500million, which we are not even sure will arrive, especially at a time when we have a toothless and pusillanimous National Communications Authority that will not be able to effectively regulate an effective foreign monopoly?

*Diverse products, mismanaged environment?*

The specialists can bandy around figures that point to gross inefficiency in GT till the cows come home, but they can never escape what the legendary Mark Twain wrote--to wit: "*there are lies, damn lies and statistics*." Even if we were to accept the plausible argument that GT is mismanaged and in dire need of capital injection, we cannot take away from the fact that despite this "mismanagement", GT was able to roll out DIALup4u, despite the fact that many foreign cards were on the market that enabled internet access with no less than a GT landline base. On top of that, GT rolled out an aggressive campaign around 2005/2006 of BROADBAND4U (est.2004), which is now reportedly available in all the regions of the country.

I am not quite sure how dedicated a Vodafone Ghana will be to ensuring that the remotest parts of the country will have broadband internet access. As a state-owned company, it will always be in its interest to ensure deep penetration of its products in the country--and the bottom line is not always what counts. Contrast that with any strategic investor that comes into the country: unless the government monitors, there will be scant attention paid to the provision of rural telephony.

Granted, landline provision for a long time was problematic, until GT came up with Easyfone, which made it very easy to set up a landline. This is not just personal experience: I know of friends and colleagues who, under Easyfone, managed to get themselves a landline within three weeks tops.

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*Know your NCA*

Remember that last week we talked about the role of NCA as a regulatory agency. Any regulatory agency ought to put premium on complaints, and how to respond to them. Seeing as Ghanaians like to talk a lot on their phone—the prohibitive Communication Services Tax of 6% has not decreased this!—it would seem to me that having a complaints page on the NCA website on http://www.nca.org.gh would be optimum.

Contrast this with the Public Utilities Regulatory Commission (PURC)—Ghana's water, electricity and gas regulatory agency— on http://www.purc.com.gh, which has a complaints page on their newly-designed site, which link can be reached here: http://www.purc.com.gh/complaint_form.php. The site even asks you when best during the day you can be contacted. I have sent an email using the NCA form on "enquiries", and wait in anticipation when they will get back to me. I have yet to try the PURC site as I don't yet have a complaint. I will be sure to get back to you on the NCA in the event that I am contacted.

That said, regulation of the telecommunications industry is much more than a complaint form.

*NCA Should Consult Public on any Liberalisation…*

According to the National Telecommunications Policy, the NCA is supposed to "for all liberalisation and licensing decisions", "conduct public consultation proceedings, inviting input from the industry, the Ministry, consumers, and other interested parties as to the course of action that will be in the best interests of the development of the country and the objectives of this policy." Do you remember the last time any member of NCA contacted any of us to proffer information on what we think is best for the development of the industry in this country? If so, kindly let me know, because I for sure don't remember being consulted as a consumer on whether I think the Vodafone acquisition of GT is good for my country! I heard economist Mr.Kwame Pianim, Chairman of PURC and -- as he said himself –- Board member of Zain, speaking on a private radio station on Tuesday not only defending the sale as necessary for the injection of capital into a suffering economy, but also maintaining that "serious-minded" Ghanaians will understand the sale as important for Ghana. I don't remember asking him to make that decision on my watch.

*…and even before issuing a licence*

Furthermore, according to the policy, the NCA ought to have conducted before the end of 2006 a "further review of market competition in the international segment…to determine the effectiveness and adequacy of competition." If NCA believes it to be in the public interest, "additional gateway licenses may be made available." We are told that the privatization of GT was broached back in 2006. Where was NCA to ask you or me whether it was in the public interest? Furthermore, where was a market review done when Nigeria's Globacom was offered a licence?

*…even providers offering next generation services*

It is old news now that Globacom will come with a phalanx of new services, including 3G network. It should not be doing this in a vaccum if we had a properly-functioning National Communications Authority. According to the policy (2.3 Liberalisation and Licensing regime), subset on "frequency authorizations" (p.10), "when considering granting licences to offer next generation mobile services, NCA may grant preference to existing mobile license holders; however it shall conduct a market review to determine whether some licenses should be exclusively offered only to such licensees." Which prompts the question: why were all the other mobile providers, including ONETOUCH left out? Could money not have been raised to ensure the state-provider's landline obtain the edge over the other ones?