Desperate GT Shuts Off ISP Lines, Blames VOIP, But...

Ten days ago Ghana Telecom put all the country's ISPs on one-way circuits so that they could only receive incoming calls. In a move uncannily reminiscent of Kenya Telkom's ISP shutdown before Christmas, Ghana Telecom is seeking to blame the loss of its international call revenue on ISPs doing VOIP. Eric Osiakwan and Russell Southwood seek to untangle the truth in this second high-profile, African clash over VOIP.

One of the first signs that something was wrong came from a participant in a local mail-list who wrote:"Is Ghana Telecom cutting off ISPs??????????? Dial up to your ISP and u get beep beep beep. If it was one ISP it could be the usual lack of QOS (Quality of Service). But if it's all of them. IS GHANA TELECOM CUTTING OFF THE ISPs?."

Before that Ghana Telecom had leaked to the Ghanaian press, the scale of its losses on international revenue. As we reported in last week's issue, the company has gone from earning US$42 million a year on its international telephone traffic to losing US$14 million over the last four years. In 1998, the International Telephone Traffic Revenue yielded US$42 million. The following year, it dropped by $8.14 million to $33.98 million followed by a further drop in 2000 of $7.63 million to $26.4 million in 2001. This further reduced by $7.06 million to $14.14 million last year.

In a move that looked as if it had been planned with Ghana Telecom, Ghana's independent regulator, the National Communication Authority (NCA) announced that it was commissioning a technical team to among other things investigate how some ISPs caused the loss of more than US$30 million to Ghana Telecom. The acting Director General of the NCA, Major (rtd) J.R.K. Tandoh says there is evidence to show an increasing decline in revenue from international calls.

The Chair of the Ghanaian ISP Association (GISPA), IDN's Francis Quartey (jailed previously for allegedly operating VOIP calls) issued a statement refuting the charge that GT's losses were the responsbility of GISPA's members.

The statement opens by saying that since the operations of IDN and others were closed for 9 months and GT's revenues did not increase in the period, it can hardly be held responsible. It then makes the point that:"GT has not established clearly how this revenue is being lost. GT should establish the means by which it is losing (revenue)".

It then goes on to list the reasons for the likely decline in its revenues:

- consumers choosing e-mail over phone;

- competition from Westel, the second national operator, whose international revenues have gone up.

- the massive increase in non GT mobile subscribers whose operators have the capability to switch or terminate traffic directly into their own network.

- The number of phone lines being used by ISP?s cumulatively (IDN has 200) is not in excess of 2000 lines. At the same time active ISP subscribers number somewhere between 15,000-20,000. So even if the ISPs were using the lines to terminate traffic, the impact would not be as purported by Ghana Telecom. (Our guesstimate would be that the grey market locally accounts for between 10-15% of traffic.)

- A number of foreign satellite providers such Thuraya and others are in operation. Their activities cannot be discounted as contributor to GT?s revenue decline.

- The overall drop in the cost of international traffic. GT's accounting rate at the beginning of the period cited was approximately US$1 and is now currently 9 cents; a 90% drop in the value of traffic to GT.

- And finally, its most serious allegation:"Ghana telecom has provided huge number of phone lines to companies whose businesses are no way related to telecom or dependent on telecom services. Indeed, some of these company?s posses more phone lines than the providers ( us ). Management of GT has conveniently turned blind eye to the activities of aforementioned businesses".

Indeed when the issue of losses was covered in the local press a year ago there were allegations that GT staff members were colluding with outsiders to take revenues of this kind.

In its recommendations to Government, GISPA makes the point that losses at GT mean lower contributions to the Universal Access Fund. However if Government were to legalise VOIP, the it could tax the operators and get back this revenue and provide an opportunity for Ghana to be the telecom gateway in the sub-region.

On Wednesday last week GISPA met with the new ICT advisor to the Minister Adu Gyan in the absence of the Minister himself. Sources close to those who attended the meeting say that the adviser agreed with the GISPA representatives that GT should restore all lines to the ISPs. It was also clear that GT's move was a breach of Ghana's anti-competition laws. It was also agreed that GISPA would work with the regulator and government to facilitate the development of a framework for legalising VOIP operations. The Government agreed that it would shortly make a formal response to the situation.

In Kenya the showdown over VOIP happened to coincide with a major change in the political administration. This opened the way for a consortium of ISPs to request a licence to handle their own international connectivity which is being sympathetically considered by the country's independent regulator.

In Ghana, the situation is different. The Kufor Government was elected as a "reform" government but in the area of ICT has yet to make much of an impact. When we asked Francis Quartey about when VOIP would be legalised in an interview in the last issue he said: "The Director General of the NCA which is the regulating body of communications in the country as well as the Minister of Communication have both publicly stated their readiness to license VOIP operators.

In any case, I do not believe VOIP is illegal in Ghana- at least not in the eyes of the rule of law of the land. When will VOIP be legalised in Ghana? I suppose when we gather the political will". Will Ghana's Minister demonstrate that he has the will to make this change?