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25.01.2006 Business & Finance

WESTEL Now State-Owned

By Graphic

The troubled Western Telesystems (WESTEL) Company has now become a fully-owned state entity.

This follows the government's acquisition of the two-thirds equity share of ACG Telesystems Ghana in the company through the Ghana National Petroleum Company (GNPC). Previously, the state owned one-third shares in the company.

The move now makes the government the sole shareholder of the nation's two fixed-line telecommunications companies, having recently bought back the 30 per cent stake in Ghana Telecommunications Company (GhanaTelecom) it sold out to Telekom Malaysia.

Reports indicate that the total sum disbursed for both acquisitions was in excess of $150 million, but the sector minister, Mr Albert Kan-Dapaah, would not confirm the figure when his ministry took its turn at the Meet-The-Press series in Accra yesterday.

WESTEL, which was licensed to become the second national fixed-line operator to break the monopoly of GhanaTelecom, has, in the past six years, been able to roll out less than 3,000 lines, thereby not being able to meet its target of about 100,000 lines per annum.

Mr Kan-Dapaah said it was the intention of the GNPC to sell off majority of its shares either to a strategic investor or float it on the Ghana Stock Exchange.

On the shares of GhanaTelecom, he said, “The government has plans to sell, on commercial terms 51 per cent of the total shares to a strategic investor.”

The Communications Minister said the government intended to appoint a transactions advisor to guide it in this process.

When the minister was asked why the government had refused to float the shares of the company on the GSE, he replied, “We know the public is interested but we may float about 30 per cent of the remaining 49 per cent to the public.”

“Let us wait for the transaction advisor to consider all the options and we will abide by what he tells us,” he added.

Responding to a question on whether the management contract the government signed with Telenor to take over the management of GhanaTelecom had expired, he replied in the affirmative and said the renewal would be based on whether Telenor had been able to meet its target or not.

GhanaTelecom, under the Telenor management, was contracted to roll out 750,000 mobile lines and an additional 400,000 fixed lines by the end of 2005 but these targets were not met as a result of a major conflict between the minority shareholders at the time, Telekom Malaysia, and the government over a $150 million loan from Alcatel Shanghai Bell of China and another $60 million syndicated loan which were to be contracted for GhanaTelecom to roll out a major expansion programme.

Mr Kan Dapaah said the government had asked the State Enterprises Commission (SEC) to conduct an evaluation of the performance of the management of Telenor and advise the government accordingly as to whether Telenor merits the renewal of the contract.

He expressed joy at the result of stiff competition in the sector which had forced down the rate charges of the operators in the industry.

Mr Kan-Dapaah said the spectacular growth in infrastructural development had enabled the telecom sector to collectively achieve tele-density, that is, person-to-phone, of 1,200 per cent within a period of five years.

At the end of 2000, the total number of telephone subscribers in Ghana was 218,000 but this had shot up dramatically to over three million subscribers at the end of 2005.

The breakdown showed 331,000 for fixed lines, 11,037 payphones and a whopping 2,655,000 mobile, with Areeba controlling more than 60 per cent of the mobile market.

This brings Ghana's tele-density up to 15 per cent, that is out of every 100 people in the country, 15 owned a phone.

He, however, bemoaned the quality of service in the industry, saying that had been the headache of many subscribers in the industry.

Mr Kan-Dapaah said the National Communications Authority (NCA) had been empowered to apply the necessary sanctions on an operator which did not live up to expectation.

“The ministry is aware of complaints made by the public on the quality of telecom services and this is the concern of the ministry,” he said.

Mr Kan-Dapaah said the NCA had been assigned the responsibility to evaluate the performance of the service providers as recorded in their respective network management systems.

He said the first evaluation process had since commenced to cover the period January 2005 to December 2005 and it was expected that the authority would publish the results and sanctions, if any, for the attention of the general public by the end of next month.

He said the authority would also intensify its public education on the interpretation of the evaluation results and also open consumer service points to receive and attend to complaints from the general public.

Mr Kan-Dapaah said the World Bank was supporting the government with $40 million to enable it to implement its ICT policy.

He mentioned the support of the bank to establish an ICT park at the Free Zone enclave in Tema to support industrial growth and technological development and indicated that construction works would begin soon.

Mr Kan-Dapaah also touched on developments in the national broadband network the national telecommunication backbone infrastructure, e-governance infrastructure platform, human capacity development in the sector, technology parks, among others, as some of the areas where there had been tremendous success.

He said the Postal and Courier Services Regulatory Commission had been established in pursuance of the postal sector reform aimed at creating a more liberalised and competitive postal and courier services environment to facilitate the delivery of quality services.