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Business & Finance | Nov 28, 2004

Westel demands $190 million from gov't

Chronicle
After seven or eight years of relative passivity, Western Wireless International (WWI), majority shareholder in Western Telesystems Ghana Limited (Westel), is in a case before UNCITRAL arbitration, demanding from the government of Ghana, $190 million in compensation for the damage it has caused Westel. According to the Managing Director (MD), Mr. William Taylor, in a reaction to a rejoinder by the National Communications Authority (NCA) to the company's press release earlier, Westel would show that NCA's behaviour had been calculated to make Westel give up and quit the county in despair. Westel is doing so apparently because it has no other choice open to it. Stating Westel's case last Thursday, the MD said the Second National Operator (SNO) Licence Agreement fully authorized Westel to provide mobile telephone services and the exclusivity period ran from the date NCA fulfilled the conditions of the provision of a national numbering plan and radio frequency. He said although the contracts had elements of mutuality and both sides had general obligations to make the contract work, NCA did not meet the conditions precedent and totally failed otherwise to make the contract work, so the Exclusivity Period did not begin and had not run out. “NCA, so completely failed to provide an equal playing field that Westel endured two years without interconnection, and thereafter operated with inferior interconnectivity. Appropriate spectrum for combined fixed and mobile operations was never provided although Westel accepted 1800 MHz as a temporary expedient but never gave up on the 900 MHz frequencies promised by the Government of Ghana.” He noted that Westel never truly got started on its operations, largely because of NCA's failures, before the Exclusivity Period was over. He said the NCA's rejoinder was totally disingenuous in jumping from the license of 1996 to the $71.146 million penalty in 2001, skipping conveniently over its fundamental regulatory failures towards Westel in the intervening period. He continued, “It is a joke to say Westel has failed while other operators have done well, when NCA has made a material contribution to Westel's alleged failure.” “Westel has not failed,” he reiterated saying, “rather NCA severely blocked Westel's start-up and operations and later turned around and fined Westel for failing to perform.” Mr. Taylor debunked the assertion that lucrative income came from its international gateway, saying that NCA knew very well that Westel had never made a profit, and had never paid dividend to its shareholders, and that the NCA itself by its unfairly punitive behaviour, had driven Westel's value down to zero. NCA is being economical with the plain truth if it pretends that it has no responsibility and no impact on the operational performance of an operator. He said the NCA was far from being fair and even-handed, and that the international arbitration panel would receive ample proof that the NCA had not been fair, even-handed or transparent in its dealings with Westel. After Westel considered that it had not received a fair hearing and a fair decision from the NCA panel, an appeal to the Minister of Communications never received an acknowledgement or reply. “Westel did not subvert any appeal process. The Minister did not provide one. The law is vague on the appeal procedure. The Minister and the NCA failed at all material times, despite written requests to advise Westel of the appeal procedure.” According to Mr. Taylor, the law of Ghana encouraged parties to a dispute to try to settle out of court. Settlement attempts were not deemed by the law of Ghana to constitute 'subversion' of any judicial process. He said, however, that the Minister's letter of September 3 was actually a shocking rejection of a framework of settlement in which Westel had agreed to pay on a no-fault basis, an uncontested amount of $25 million over a long period of time from the telecom operations of a recapitalised Westel, operating under a clean license and in an enabling telecom environment in which basic operating conditions that had been lacking would be provided by the NCA and the Government of Ghana. “If indeed Ghana Telecom has availed itself of the appellate process, then the NCA should state when GT did so, what appellate procedures have occurred, what further appellate procedures are to come, what the result of the process is,” he asked. He said the NCA must show that GT was not getting more favourable attention than did Westel's appeal. “Merely to say 'the appeal is receiving attention' is to say nothing at all.” The Licence Agreement clearly licensed, permitted and authorized Westel to engage in mobile operations without paying any further spectrum fees than those provided for in the SNO License. He lamented that if Westel had been told when it was paying $10.1 million in January 1997, at a time when the highest fee for spectrum was $500,000, that the SNO License did not cover mobile operations and that the $10.1 million was subject to further fees outside of the SNO Licence, Westel would not have signed that contract. The press conference was also addressed by the Deputy MD, Dr. J.A.M Cobbah and Kojo Bentsi-Enchill, their legal council. When The Chronicle contacted the Chief Executive Officer of the NCA for comments, he said the NCA board was deliberating on the issue and would react very soon.
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