Investment and innovation key to benefiting from SMP policy – Selorm Adadevoh tells smaller telcos

Selorm Adadevoh will leave office as MTN Ghana CEO in April this year, but before he goes he has some advice for the smaller telcos in Ghana on how they can benefit from the MTN’s significant market power (SMP) status and its related regulatory measures.

In response to a question on how the smaller telcos can benefit from the SMP policy, Selorm Adadevoh stated categorically that “there are no substitutes for investment and innovation in telecoms.”

He made the remark during an interaction with various stakeholders of MTN to mark his five years, nine months of being at the helm of affairs at MTN Ghana, which makes him  the longest-serving CEO in the history of MTN.

The meeting was themed: Five Years of Impact; Celebrating Leadership, and Digital Transformation for Progress in Ghana.

Selorm to the MTN Ghana top job in 2018 as the first ever “non-MTNer” to have held that position, coming from Digicel in Haiti. Prior to him, all other MTN Ghana CEOs were drawn from within the MTN Group.

Two years after Selorm took over (June 2020), MTN Ghana was declared SMP, because it is the dominant player with over 70% cumulative market share – voice, data, SMS, mobile money and revenue. The industry regulator subsequently began to implement a number of measures to virtually stifle MTN’s market advantage and to give the smaller telcos some urge over MTN, in a bid to “correct the market imbalance”.

Three years on, MTN Ghana is still growing in leaps and bounds while the smaller telcos are even getting worse. Indeed, per the regulator’s own records, after three years of SMP, MTN had grown market share by 12 per cent, while the smaller telcos had lost market share considerably, to the extent that even one of them, Glo, has completely checked out of the market.

So, the question was, what are the smaller telcos not doing right to benefit from all the stumbling blocks put in MTN’s way in order for them (the smaller telcos) to push ahead?

Investment 

Selorm Adadevoh noted that telecoms is infrastructure heavy and that means every player, whether SMP or not, must invest heavily to build capacity and meet the ever increasing consumer demand on the network.

Indeed, under Selorm, while MTN yet remained an SMP, the company kept investing averagely GHS1 billion every year in the network. Besides that, MTN Ghana even spent extra money to acquire more superior spectrum in readiness for current and future demands on the network, while all the other telcos, which are owned by multinationals sat by and watched.

According to Selorm, it does not matter whether a competitor’s growth is being curtailed in or not, what matters is for every telco to have a high investment appetite, otherwise that telco will not grow.

Innovation

Selorm Adadevoh also noted that there still remains very huge opportunities in home internet, private network and even the financial services as well as healthtech, edutech and other areas for the smaller telcos to innovate around.

According to him, internet to the home is largely a fallow ground, with less than 10% of the market gone, and the remaining 90% plus still available, saying that this is an area where the smaller telcos can tap into and boost their revenue and profits without waiting for some SMP policies to deliver gains for them.

He also noted that private networks for sectors like the mining, oil gas and others is also largely untapped and they still present opportunities for the smaller telcos.

With regards to opportunities in financial services, the outgoing MTN Ghana CEO said the smaller telcos must begin to think outside of the box and start innovating around how to provide financial services to people who do not necessarily use the particular telco’s SIM cards.

It would appear that all telco-based financial services are linked to the particular telcos’ SIM cards. Meanwhile, even small non-telco players in the market like Zeepay and others have developed products that enable them to tap into SIM cards of all the telcos and provide very innovative services and reap the benefits.

Selorm Adadevoh believes that is something the smaller telcos should be doing instead of just innovating only around their own SIM cards. Indeed, he hinted that MTN Ghana put forward some proposals to roll out some innovations in that regard, but that is yet to see the light of day.

SMP policy flaws

Touching on the SMP policy itself, Selorm said it would have been more profitable to the entire ecosystem if the policy measures had been designed to encourage the smaller telcos to invest in the untapped areas listed above.

Over the three years of SMP implementation, the NCA said it has saved the smaller telcos over GHS86.6 million in interconnect fees they would have paid to MTN. But the NCA stopped of saying whether it was able to monitor how those money were used by the beneficiary telcos. Meanwhile, over that period, MTN kept investing billions of cedis into its network.

New investors for Vodafone and AT

But Selorm’s advice to the smaller telcos is coming at a time when both Vodafone Ghana and AT Ghana have gotten new investors who are gearing up to roll out some innovations to make the respective telcos profitable again.

Vodafone Ghana is about to rebrand to Telecel, following the acquisition of 70% shares in the company by the Telecel Group a year ago. Telecel has promised to invest some US$500 million in the network over the next three years and its focus will be mainly around broadband and fintech.

AT Ghana (AirtelTigo) has also recently announced that an investor by name Hannam Investors have taken over as partners of the government, and are about to make some investment into the company to reposition it for profitability.

Weathering the SMP storm

Selorm saw MTN through the tides of SMP regulatory measures and it was as if those measures were even non-existent because MTN kept growing, not just in market share but also in revenue and profits.

Under the five years of Selorm’s leadership at MTN Ghana, three years of which it has been under SMP pressure, the telco recorded four times its revenue and six time its profits, using 2017 revenue and profits as the benchmark.

Selorm is credited for being a transformer when it comes to technology and digitalization, a typical example being the overwhelming success of the MTN TurboNet under his watch. So, his advice to the smaller telcos on how to rise from the non-profitability is critical. He has the results to show for it.

Advice for Successor

Speaking of advice, Selorm also has an advice for his successor, Stephen Blewett, and that is for him to focus on the medium-term performance of the company and build structures that will yield benefits over that period instead of just in the short-term.

He explained that it is important to take a medium term view of the company’s performance because short-term performances are not sustainable. In that regard he is urging the new CEO to focusing on building the network, establishing a commercial framework, reducing cost and also building and motivating the team to deliver.

Selorm will leave MTN Ghana in April 2024 and take on his new roll as the Chief Commercial Officer of the entire MTN Group. He is the second Ghanaian to have been promoted to the MTN Group. The first was Ebenezer Twum Asante, who was the Selorm’s predecessor in Ghana and is now Senior Vice President for Markets at the MTN Group.

Source:techfocus24