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21.02.2009 Business & Finance

Ghana’s mobile licensing regime rated best in Africa


The unified licencing regime employed by the National Communications Authority (NCA) in awarding mobile licences in the country has been rated as the best for telecom operators on the continent, B&FT has learnt.

Currently Ghana, Nigeria and Uganda are among the few African countries that have introduced the unified licences in awarding new mobile phone licences, which include those recently secured by Globacom Ghana Limited and Zain Ghana Limited.

A study recently undertaken by global Research and Consulting giant Ernst & Young, dubbed Africa Connected: A telecom­munications growth story and made available to B&FT has found out that the unified licences give greater opportunities to operators than any other type of mobile licence in the world.

“These licences have helped to unlock growth by allowing operators to choose technology most suited to their needs and allowed mobile phone operators the opportunity to venture into the fixed-line environment, as well as value added services,” said Julia Lamberth, a member of the research firm.

The study, which was conducted in the third quarter of 2008, involved 28 senior figures and decision-makers of telecom firms on the continent including Ghana's Millicom Ghana Limited, Ghana Telecom Company Limited, and MTN Ghana Limited.

“We are noticing the emergence of a number of countries who have adopted a converged/unified licence regime. This blurs the old distinction between fixed and mobile services,” noted one of the fixed-line operators interviewed in the study.

The report noted that despite the current economic downturn in the global financial market, telecommunications in Africa would continue to develop faster than any other region over the next three to five years, with Ghana and Nigeria driving the mobile phone growth in the West­ Africa sub-region.

“Even with great disparities between individual African countries, overall penetration rates remain low and there is significant room for expansion despite the fact that the average mobile penetration for the continent stands at 37 percent and is expected to rise to 61 per cent by 2012.

“Those countries that have established independent regulators and switched to unified licences are likely to find themselves at the forefront of African telecom­munications,” said Vincent de La Bachelerie, Global Telecommunications Leader for Ernst & Young.

Past growth has been driven by increasing numbers of subscribers, all using basic voice services. Future expansion is expected through the variety of services on offer.

“The construction of new submarine cable systems is likely to have a fundamental impact on African telecommunications,” says Julia Lamberth, co-leader of Ernst & Young's Global Telecommunications Centre Africa (GTC Africa).

“The availability of more reasonably priced bandwidth could open up the market for cheaper connectivity across the continent and create a platform for a new era in African communications,” she added.

In Ghana, Main One Cable has been licensed by the NCA to supply an under sea cable system to provide data services for telecom companies. Meanwhile, Globacom is also constructing the Glo-One cable system to link Ghana and Nigeria and potentially other countries in Europe.

On the public sector front, the multi-million dollar construction of fibre-optic cable infrastructure by government is nearing completion and these projects are expected to boost competition and increase diversity of products in the country.

These are indeed exciting times for the telecom industry.

However, the cost of telecom services in the country, especially mobile pricing, remains higher than the international average when compared with earning potential. While the cost of 100 minutes of mobile use internationally costs 30 per percent of Gross National Income (GNI), for African consumers like Ghana, it costs 77 percent of GNI.

The arrival of a real low cost operator in Africa remains a new frontier to be reached.

Source: B&FT