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28.11.2005 General News

GT threatens legal action to recover C400bn debt

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Accra, Nov. 28, GNA - Mr Oystein Bjorge, Chief Executive Officer of Ghana Telecom (GT), on Monday said GT was going to take legal action, where necessary, to retrieve receivable debts from defaulting subscribers, which currently stood at 400 billion cedis.

He said already some non-paying customers had had their phone lines disconnected and retrieved and their names have been published in the newspapers.

"The free riders will not be accepted anymore. All customers with overdue payments will experience our increased efforts to retrieve our outstanding debts and, if necessary, legal action would be taken," he warned.

Mr Bjorge gave the warning at a press conference to make public the achievements and challenges of GT since the takeover by the Norwegian company, Telenor.

He noted that at the time it took over from the Malaysians in 2001, GT's financial status was in shambles and the company was at the brink of bankruptcy due to heavy subscriber debts and fraud in the billing system.

"In fact, the major part of the debt was incurred in 2001 and earlier. In 2001 receivables over 180 days increased by 224 billion cedis alone corresponding to almost one-third of the total revenues. Consequently there was a huge under provision for bad debts," he said.

Mr Bjorge stated that at the time of the takeover, GT was losing 25 per cent of its total revenue through revenue leakage in the billing system, saying: "Since we took over we have reduced the revenue leakage to 10 per cent."

He said as a result of the bad debt and revenue leakage inherited from 2001, GT made a loss of 85 billion cedis in 2002. However in 2003 net income rose to 115.642 billion representing a 145 per cent increase and to 177 billion in 2004.

Meanwhile due to "an unfair interconnectivity regime", he said, 37 per cent of total revenue generated every year went into the payment of interconnectivity fees to mobile phone operators - Areeba, Buzz and Kasapa - with the chunk going to Areeba.

He said currently GT paid about 27 billion cedis every month to other operators.

"Ninety per cent of the cost of goods sold is interconnect fees payable to other operators. For the last three years GT has paid interconnect fees to other mobile operators in excess of 110 million dollars and in 2005 alone the amount will reach more 48 million dollars, VAT inclusive to one operator," he said.

He asserted that interconnect fees payable by GT to mobile operators represented a substantial part of such operators' net profit, saying that currently GT owed 200 billion cedis to Areeba alone.

Mr Bjorge said under the stated circumstances, GT was seeking a change in the unfair interconnect regime by the National Communications Authority (NCA), adding that harsh measures were also necessary to ensure that those indebted to GT paid in time to save the company from plummeting.

He said GT was, therefore, introducing a prepaid solution system called Eazytalk, in which all existing post-paid fixed lines and subsequent fixed line customers would be migrated unto a pre-paid platform to eliminate problems of bad debt in the future.

Mr Bjorge was quick to point out that Ministries, Departments and Agencies (MDAs), the security services and corporate customers that used to be GT's biggest debtors, had paid up and individual customers were now the defaulters.

The CEO said other measures such as a traffic monitoring system to check management fraud, intensive IT training for staff, installation of anti-tapping equipment and disconnection of phone lines identified to be involved in illegal termination of international calls, were some of the hard measures put in place to check revenue leakage and fraud. He said the Network Operation Centre and GT Call Centre had both been centralized to ensure effective monitoring to prevent illegal connections and loss of revenue to the company as well as to respond to customers' needs swiftly.

Mr Bjorge noted that though currently GT was trailing behind Areeba and Buzz as the third biggest cell phone network in the country, measures were underway to increase mobile network capacity from the current 600,000 to one million by the close of 2005.

"We are also coming up with a fixed line system to be supported by our GSM network, under the name 'One4All'. This will be a better option for communication centre operators as it will provide calls for all networks as against the Areeba to Areeba calls service provided," he

Mr Bjorge said management was also seeking accreditation for the Ghana Telecom Training Centre (GTTC) to be given university status and be called Ghana Telecom College (GTC), where IT degree courses would be offered for staff and others.

"Already the company's training program has benefited 822 people in 2003; 2,995 in 2004 and this year 3,936 people have been trained both in Ghana and abroad to improve individual and institutional efficiency," he said. "The system we are running now does not pay presence but performance."

He said to show commitment to customers, GT had added more value to existing products and introduced new products such the Broadband 4U, a faster internet service, Dial-Up, Fixed Cellular Terminals, Wireless Local Loop and Multi Protocol Label Switch, Top-Up Cards and S-Club, a new service designed for tertiary students.

Mr Bjorge spoke on issues regarding expatriate staff in GT and their remuneration, saying that the number of expatriate staff currently stood at 25.

He also debunked allegations that the salaries of the 25 expatriate staff at GT were far in excess of the sum of the salaries of the 4,200 workers at GT. 28 Nov. 05