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Ghana Telecoms: High cost and poor quality test mobile phone users’ patience

By Gemma Ware in Accra
Posted on Monday, 25 February 2013 11:57

Consumers and regulators alike are running out of patience with poor service quality among mobile phone operators in Ghana.

In late November, the country’s telecoms regulator banned South African group MTN, Ghana’s most popular network with 11.7m subscribers, from selling new SIM cards because of call drops and deteriorating service.

Although the National Communication Authority (NCA) lifted the ban a month later, it was a stark warning to operators to improve their performance.

While the NCA ban was based on a couple of large outages on the MTN network, industry representatives point to larger structural problems eroding quality of service.

Kwaku Sakyi-Addo, chief executive of the Ghana Chamber of Telecommunications, insists that quality of service is “fairly good relative to markets with similar socioeconomic environments”.

He points to issues such as cut cable caused by road construction and theft as key bugbears for operators. “We counted close to 700 cable cuts between January and October 2012 – almost double the 2011 figures,” he says.

Administrative bottlenecks also hold up operators’ infrastructure development. “In 2012, one tower company had wanted to build 50 new towers around the country, but they didn’t receive a single permit. Another wanted to build 50 in Accra but received a permit for just one,” explains Sakyi-Addo.

After almost two years of advertising, Ghanaian consumers and tech start-ups had high hopes for better service from Glo Mobile Ghana, owned by Nigerian businessman Mike Adenuga, which finally launched in August.

Glo’s entry – and its ubiquitous green branding plastered across the country – has pushed others to innovate and develop new product offers. For example, Tigo, owned by Luxembourg-based Millicom, launched a bonus airtime promotion called Free Bonto in January.

But after teething troubles on the Glo network – which launched in a rush after the NCA fined the operator for delays – it has had a sluggish start and subscriber numbers fell slightly towards the end of 2012.

Many argued that the arrival of new overseas fibre-optic cables GLO-1 and WACS in 2011 would push down internet prices, but they remain high.

Vodafone, which has a captive market among corporate clients, raised its prices for fixed domestic broadband from ₵45 ($24) to ₵65 per month and introduced a cap of 15 gigabytes in place of its previous unlimited package.

The move sparked an angry Facebook campaign from customers and consumer groups.

Alongside Egypt and Qatar, Ghana is one of Vodafone’s fastest-growing businesses, but the group does not publish separate revenue figures for its Ghanaian operation.

Competition brought by new broadband providers licenced by the NCA could help push down prices.

On 14 February, the NCA awarded 10-year Broadband Wireless Access licences to two companies – Surfline and Goldkey Properties, each for the cost of $6m.

“Maybe the internet has become a bit better, but the prices definitely haven’t gone down,” says Anne Amuzu, chief executive of Nandimobile, a startup that provides services to companies to message clients and monitor complaints.

Amuzu says she is lucky that Nandimobile is based in the Meltwater Entrepreneurial School of Technology Incubator in the East Legon part of Accra, where internet and office costs are shared.

Since its launch in 2010, Nandimobile has around 100 clients, including domestic airlines such as Starbow, faith based organisations and fitness centres keen to build up text-based relationships with their customers.

Meltwater hosts another 10 companies, including Saya, a text message service for traditional feature phones but with the feel of a smartphone service such as WhatsApp, and RetailTower, an e-commerce platform aimed at the US market.

Yet Amuzu says that outside of incubators like Meltwater it is difficult for companies to get off the ground because of the lack of bank finance and seed funding. That means many would-be entrepreneurs end up freelancing as web designers instead.