Communications Ministry considering possible Duopoly in Ghana’s Telecom Industry

The Ministry of Communications and Digitalization is reportedly considering the possibility of propping up a telecom company that will form a duopoly with current market leader MTN.

MTN’s dominance of the industry is said to be a source of discomfort for the Ministry which fears that the dominance could end up in the disadvantage of competitive checkmating.

Online news portal, TechGH24 reports that there are discussions at the Ministry about creating a duopoly in the telcos industry to dilute MTN’s overwhelming dominance of the market.

This duopoly would be created by getting Vodafone, which is the second leading industry player and AirtelTigo which is the third, to merge.

Already, the government recently sealed its takeover of AirtelTigo in what is seen as the march towards creating the anticipated duopoly.

Citing a highly placed source who is an expert, the portal reports that a merger between Vodafone and AirtelTigo is seen as the most feasible as this would create a sizeable entity with over 40% of the market share to MTN’s approximately 57% market share.

The country’s telecoms market players are MTN, Vodafone, AirtelTigo and Glo. But Glo has been struggling to stay afloat in the market after it had stormed the market years back with so much promise.

As things stand now, MTN has 57% voice market share and 68% data market share, while Vodafone has close to 23% voice and 14.5% data, and Airtel Tigo had slightly over 18% voice and little more than 16% data.

So together, Vodafone and AirtelTigo would have a comfortable 41% voice and 30.5% data, reports TechGH24.

In June last year, the Communications Ministry declared MTN as a significant market power (SMP), after MTN had for several years controlled more than 75 percent of voice, data and the mobile money markets.

The Ursula Owusu-Ekuful-led Communications Ministry had initiated moves to break the dominance of MTN, in what ended in a lawsuit.

Meanwhile, MTN also dominates the mobile money market. Minister of Communications and Digitalization, Ursula Owusu-Ekuful recently told participants at the Ghana Technology and T4elecoms Awards that, in the third quarter of the year, there were over 1.085 billion mobile money transactions on MTN alone, while Vodafone managed some 120 million-plus and AirtelTigo did a little over 68 million.

This means MTN controls over 85 percent of the market.

According to TechGH24 its source suggested that naming MTN SMP was most likely the beginning of a strategy to tame it and create another entity that can give it proper and fair competition.

Earlier in the year, the government announced the acquisition of AirtelTigo, reportedly for US$1 along with the company’s liabilities. AitelTigo is a merger between Airtel and Tigo. Tigo is a company that was brought into the country by President Akufo-Addo and his partner.

Airtel was already 25% owned by the state. The government also has a 30 percent stake in Vodafone Ghana, meaning a marriage of the two companies under the auspices of government should be easy.

Meanwhile, MTN has announced that it is complying with all the regulatory requirements that came with the SMP declaration.

Source: Whatsupnewsghana