The National Communications Authority (NCA) is gearing up to start regulating the frequency with which telcos adjust their tariffs in the country, and this is specifically because of the emergence of MTN Ghana as a significant market power (SMP).
Traditionally, NCA does not regulate tariffs, but it has been compelled to initiate the process towards tariff regulation solely because of the existence of a significant market power (SMP) called MTN in the telecoms industry.
The NCA is doing this in pursuant of Section 25(2) of the Electronic Communications Act, 2028, Act 775, which states as follows:
The Authority may establish price regulation regimes, which may include the setting, review and approval of prices by Regulation, where
(a) there is only one network operator or service provider or one network operator or service provider that has significant market power,
(b) a sole network operator or service provider or a network operator or service provider with significant market power and cross-subsidises network or service, and another electronic communications
(c) the Authority detects anti-competitive pricing or acts of unfair competition.
Since naming MTN SMP, the NCA has accused MTN of violating SMP rules at least once, when MTN prized its Data Zone bundles below the price the non-SMP telcos were offering for similar packages. MTN was then compelled to abolish those low-priced packages and raise the prices. Barring that, per (a) above, even the very existence of one SMP in the industry, gives the NCA the right to regulate prices.
Background
In June 2020, the NCA declared MTN Ghana SMP, saying that the telco had controlled over 75% of voice, data, SMS, mobile money and revenue share in Ghana’s telecoms industry several years prior. It therefore became necessary to name MTN SMP in order to implement the necessary measures to correct the market imbalance.
It has been more than three years since MTN was declared SMP, but the industry is yet to witness a single positive dividend. The status quo, in terms of the structure and trajectory of the industry remains unchanged in spite of the SMP declaration. In fact, MTN seems to be growing at a faster rate now than in the pre-SMP era.
For instance, three years after declaring MTN SMP, they increased subscriber base by 12%, while the non-SMP telcos supposed to benefit from the SMP regulatory interventions, lost subscriber base and market share significantly over the period. Again, the industry revenue numbers paint an even more problematic picture, as MTN is currently recording almost 90% share of total mobile finance revenues, for instance.
Already, the NCA has asked MTN not to have the lowest tariffs for any electronic communications services on the market. The directive was intended to make MTN relatively less attractive to Ghanaians. Indeed, it led to MTN increasing the prices of all its services, which generated a widespread outcry from customers, as was expected.
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