Business News of Monday, 18 March 2013
Source: Graphic Business
Telecommunications company, MTN, says it has to spend an additional GHS6 million on power costs and back-ups, as well as fuelling vehicles to keep its operations running due to the ongoing power crisis.
The company said it was already contending with high operational costs stemming from multiple taxes, permits, high utility tariffs, as well as volatile exchange rates, which translated into exchange rate losses.
The company generated revenues in excess of GHS1.5 billion, net of Value Added Taxes and Communications Service Tax, last year.
However, it had to pay over GHS400 million in total taxes and levies to the government.
The Chief Executive Officer of Scancom Ghana Ltd, operators of MTN, Mr Michael Ikpoki, made this known to a section on the media in Accra during this year’s MTN Editors Forum.
The forum brought together editors, media owners, senior correspondents and specialised information and communications technology (ICT) reporters to share information with them on recent happenings in the company, including the company’s annual report and also share some perspectives on industry issues.
Mr Ikpoki said out of the huge revenues it generated during the year, only 16 per cent was set aside as retained earnings (net profit).
According to calculations of the Daily Graphic, the net profit should be in the region of GHS248 million.
While the company devoted 15 per cent of revenue each for interconnectivity upgrading and capital investments, rentals and utilities took 11 per cent of the revenue as 10 per cent went into paying commissions to dealers.
But Mr Ikpoki said in spite of the challenges, the company was happy to be making real impact on the Ghanaian economy, saying the company engaged the services of 1,600 direct employees with over 260,000 within the distribution value chain.
Last year, MTN invested over GHS11 million in corporate social responsibility through the MTN Foundation, which impacted about 10 million lives.
The chief executive said the company was committed to improving its network and upgrading many of the sites from second generation (2G) systems to the much advanced third generation (3G) systems to give more values to the customers.
Mr Ikpoki said since mobile phone had now moved into how a network could make the service relevant to solving issues and making them relevant to everyday life, the company would continue to deliver bold digital services and roll out innovative products, while forming partnership with relevant stakeholders.