HOW NOT TO SELL GHANA TELECOM, PART 2

Putting national interest first

Having received numerous responses to my initial teaser on the sale of Ghana Telecom, this sequel is just to elucidate the positions of the many well-meaning Ghanaians – like me, who are against the give-away of another, of our crown jewels with no surety. Having assessed this deal thoroughly, and with the unwillingness of the proponents of the GT sale to openly indulge in an open debate, I can summarise this write-up by saying; - “the GT/Vodafone deal looks good from far, but it is far from good.”

In truth, any arrangement that seeks to give away more than 40% of Ghana Telecom qualifies as “a sale” – as in selling off. On the other hand, issuing less than 40% to any investor, angel or strategic, qualifies as a “partnership”. I believe Ghana Telecom needs a partner, not a buyer, as is currently the case; a partner that understands the business of telecommunications and the effects of technological advancements on the industry.

The company needs a strategic partner who could re-position it, to take advantage of new streams of income in the telecommunications industry. GT enjoys the trappings of a monopoly, and only a new group that can initiate and manage change in the technical, financial and operational domains of the company could help turn things around. GT when properly managed, has the ability of employing more than twice its current workforce in allied and related businesses - the only thing holding it back is the boardroom interference and political “mis-interventions” that have not been consistent with its growth strategy. I do not believe at this point, that GT has any strategic growth plans, aside being a cash cow for our political elite.

It is common knowledge that GT's problems are a handful (a topic for my next write-up), but it will take commitment, consistency, and strategic thinking, aside an understanding of the telecommunications business, to deal with those issues. Telecommunications is a very dynamic industry, led mostly in part by advances in technology through innovation

MY 10 POINT STRATEGY
The only way that Ghana could enter into a contract from a position of strength is to do its due diligence, put in some hard work at number crunching as well as draft a common sense contract that will meet 21st century telecommunications industry standards, keeping the country's interest above all else.

In order to take advantage of the mishaps that have brought us to this point, after the millions that were paid to Telenor for virtually no work done - we must approach GT, as an umbrella company that has 4 subsidiaries – One Touch (Mobile Business), GT Broadband (SAT3 Internet business), GT Landline (Home Phone business), and the Ghana Telecom University.

With that in mind, we can follow this 10 point plan or similar;

(a) GT Broadband (the fibre-optic internet businesses) must be stripped off from the current GT management as soon as possible, and placed under the management of a new and autonomous business entity. (Benefits to be discussed later)
(b) One Touch (the mobile business) must also be stripped from GT Management and placed under an ad-hoc management team that will appraise it for sale.
(c) Complete a needs identification and analysis for GT; this will collate and document what Ghana Telecom needs to compete favourable in the local and world markets.
(d) Develop a comprehensive plan that translates the solutions to the needs identified in (c) above into a long-term plan with specific objectives and a comprehensive earned-value management system to monitor and streamline performance and growth.
(e) Break down these long-term goals into achievable, well-defined and manageable milestones, which will address in total, the needs identified in (c).
(f) We can then determine the 'real value' of Ghana Telecom – minus the Fibre-Optic and mobile phone businesses, factoring in its assets, customer base, revenue potential and strategic importance, - minus its liabilities. At this point we can prepare to enter into a purely strategic partnership that will benefit the country.
(g) Develop performance metrics that will monitor the effort of the strategic partner in delivering on the “strategic milestones” as per (e) above. This performance agreement becomes an integral part of all negotiations, introducing a buy-back option, should performance of the partner fall short of margins set forth in the agreement.
(h) Advertise and promote a transparent tender for a strategic partner through a request for proposal (RFP) for the purchase of between 30 and 40% of Ghana Telecom. The partner must have the experience, track record, manpower and the technical know-how to meet the goals set in (e) above. We will have the opportunity to scrutinize the responses to the RFP, which will detail among other things the “Implementation Plan” that the partners intent to adopt, should they win the bid. It is on this basis that the best partner could be selected.
(i) Government must then retain 51% of GT stakes and float the rest on the open market in Ghana for Ghanaians. This is a sure way of helping restore confidence in the Telecommunications industry in Ghana, with citizens sharing in the telecom wealth. It will also help Government raise funds easily by issuing GT bonds on the open market as and when necessary.
(j) Government must as a matter of urgency bring some normalcy, transparency and trust into the IT&T industry through legislations, incentives and also encourage stakeholder participation in finding solutions to the issues that stymie the growth of telecommunications in Ghana. This will include the following;
i. Ensuring that, GT Board Members are selected based on their knowledge of at least two of the 4 domains that govern telecommunications – finance, management/operations, technical and (or) legal.
ii. That the NCA serves the interest of the masses in growing telecommunications in the country, especially in setting the legal framework within which companies will operate.
iii. That GIFTEL – the fund for telecommunications development is repositioned and restructured to meet the demands of modern day Ghana.

THE RESULTS

The outright sale of One Touch will result in increased competition in the mobile business sector in Ghana, now that GloMobile has also entered the fray. This will help improve service delivery, customer service and product offering, in addition to driving down prices. If Areeba sold its operations in Ghana to MTN for $5 billion, One Touch could easily fetch 2 billion, all things being equal.

The sale will also provide more than enough money to pay off our mounting telecommunications debt, including the $34million accrued from the upgrades that were done by Alcatel Shanghai Bell under the tutelage of Telenor. GT will then run under a partnership with sound management practices, and a Board that understands the business.

The government will be doing more than paying lip service to Ghanaians in its stated bid to bridge the digital divide by positioning the Broadband business to provide innovative services that will reduce the cost of internet connection. It is a sure way of guaranteeing very favourable prices to the ISPs in Ghana, saving that will be passed on to subscribers, cutting down on the prohibitive costs of internet connection.

The Ghana Telecom University, with its newfound autonomy, could provide the quality workforce that the nation needs to sustain its telecommunications industry through the provision of graduates that immersed in new technology relevant to telecommunications and information technology, as well as management and finance.

With this, Ghana would have salvaged the internet business which would still be a 100% Ghanaian owned company, the landline business which would be majority owned by the State, and we would have repositioned the Ghana Telecom University, with more than a $1 billion (estimates) profit after paying off the debts of GT. These moneys would accrue from the outright sale of One Touch and the 30-40% stake sold to the strategic partner.

Let commonsense prevail so the right thing done. We are Ghanaians first, so lets put the Ghana first, rather that mortgage the future of the next generation through greed and narcissism. Mindless partisanship in this issues, will destroy more than the structures called Ghana Telecom. Did someone say that GT was of strategic importance to Ghana?

This Vodafone deal looks good from far, but very far from good. Let's kill it now.

- In my next contribution on this GT issue, I will be laying out another 10 point strategy, this time - for breathing some life into the Telecommunications sector in Ghana as a whole, aside pointing to the problems plaguing Ghana Telecom.