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Business News of Monday, 19 October 2020

Source: Samuel Dowuona, Contributor

#DataMustFall or #DataLeakageMustFall? - Part 1

Last week, one of the hashtags that trended most on social media was #DataMustFall. The message was clear – mobile data prices are too high and unbearable for Ghanaians so they want a reduction immediately. The actual chorus was that they do not feel the recent Communication Service Tax (CST) reduction in their data experience, even though on September 15, 2020 all the telcos announced they have applied the CST cut to airtime and data tariffs.

This is not the first time anyone would complain about steep internet cost in a developing country. World Bank Vice President for Africa, Hafez Ghanem, made a similar observation on her visit to Ghana recently. She then urged the Communications Minister to make it a policy to ensure a reduction in internet cost in Ghana. Indeed, the Minister assured her that plans are afoot to engage industry players and discuss alternative sources of revenue for them in exchange for a significant reduction in the cost of internet. Good news.

But it would serve some good to put this all-important consumer issue into the right perspective. First of all, Alliance for Affordable Internet (A4AI), the global body that is at the forefront of the fight for “affordable” internet, particularly in developing countries, has been churning out reports on the cost of internet in relation to income levels in developing countries (including Ghana) as a basis for their advocacy for internet prices to be pushed further down.

#DataFallingAlready

Per the A4AI annual reports, between 2015 and 2019, 1GB of internet cost, in relation to incomes in Ghana, has been dropping almost consistently. In 2015 internet cost was an average 3.89 percent of gross national income (GNI); 2016 it went up to 4.11 percent. Then it dropped to 3.56 per cent in 2017 and by Q1 2019, it had dropped significantly to 2.03%. The point here is that the price of data in relation to incomes has been dropping, or better still, people are spending less and less of their income on internet.

Moreover, British technology research firm, Cable has also been churning out annual reports on the cost of mobile data in 228 countries, including Ghana. In 2019, Ghana was ranked sixth in Africa in terms of mobile data affordability – recording an average of US$1.56 per 1GB of data. This year, Ghana still remained at the sixth position, but the average cost of mobile data in the country has actually dropped to US$0.94 per gigabyte. Ghana is 34th in the world, out of 228 countries captured in that report this year. (Click this link and download League Table).

So, in spite of the public outcry and charge by the World Bank Africa VP, the evidence would show that indeed, data prices are general dropping in the country. That is not to say that it is affordable for the entire population, as A4AI reports that till date, about 40% of the Ghanaian population do not have access to the internet and quite a number of those who have access too, are spending a significant part of their meager income on internet access. The phenomenon where one person uses two or more SIM cards in Ghana, creates the false impression that many Ghanaians are connected to the internet. But the A4AI study proves otherwise.

CST Law

But the fact is in 2008, it was government, not telcos, which decided, by law (Communications Service Tax Act, 2008, Act 754), that in addition to the 12.5% VAT, 2.5% National Health Insurance Levy and 2.5% Ghana Education Trust Fund Levy Ghanaians were already paying on airtime purchase, they should also pay another 6% tax for using the airtime purchased. So, when one buys GHC1 airtime, he or she gets to use only about 78Gp because four different taxes are withheld on that airtime by the telcos and paid to the Ghana Revenue Authority as consumer taxes.

When NPP was in opposition, they protested the introduction of the CST, claiming it will burden Ghanaians. But when they came power in 2016, they decided the tax should be raised to 9%, in spite of huge public outcry and criticism from NDC apparatchiks. They claimed the revenue from the increased tax will be invested in a number of technology-related ventures for the benefit of Ghanaians. But once the world was hit with COVID-19, the NPP government made a quick u-turn and decided the 9% CST should be dropped to 5%, which is even lower than the original 6%. Upon the reduction, telcos passed on the benefit to customers from September 15, and that widely reflected in data bundle volumes going up and tax component of airtime also dropping.

Examining #DataMustFall

So, when people complain and say #DataMustFall – that they do not feel the reduction in the CST, what exactly are they talking about? Following the hashtag trend, Techgh24 has been finding out from some consumers on Facebook, Twitter and WhatsApp, what exactly their concerns were – whether it is about data experience, data running out faster or that the cost is indeed high. The truth is the 4% CST reduction has been widely applied, so generally speaking, no one can deny that.

Per the response Techgh24 received across platforms, the main concerns were poor data experience and data running out faster than they expected. Generally, there is a suspicion that telcos only give increased data volumes to reflect the 4% CST reduction, but they have a way of sucking data from customers devices on their blind side. This far, it is nothing but a mere unproven suspicion, like many of the other unproven suspicions people have about telcos in the country. So, until someone submits hard evidence, like one Vodafone customer did, it is okay to move on to other factors rather than dwelling on mere suspicions.

Fair concern

Speaking of the Vodafone customer, Isaac Amoyaw, he sent a message to Techgh24 stating categorically that prior to the increase in CST to 9%, he was on a Vodafone bundle that gave him 10GB plus some SMS, on-net and off-net calls for GHC100. When the CST was increased by 3%, the cost of that same package went up by 8% (not 3%) to GHC108, but strangely the data component dropped to 8GB, in spite of the 8% price increase. Then the worst part was after the drop in CST to 5%, the price has gone back to GHC100, but the data component of that package has also dropped drastically to 3GB.

That was kind of strange to hear – that when taxes dropped, the price came back to the original GHC100 but the data component was not even maintained at the reduced 8GB but down to 3GB. Techgh24 checked and realized that indeed, Isaac was right, but it would appear Vodafone has decided to peg that package against similar packages being offered by competition; and from the comparison, the Vodafone package, that Isaac and others are not happy about, seem to be a better deal than what competition is offering.

But the chronology of events on the pricing and volume of data in that package, still does not make logical sense, and Isaac’s concerns are understandable, particularly after he received an SMS from Vodafone assuring him of improved data volumes following the application of the 4% CST reduction. Well, Vodafone is yet to give an official response to a query from Techgh24 on this matter.

Quality of Service and Experience

However, looking at the common theme in the responses from people Techgh24 contacted on social media, it would appear that fast depletion of data and poor data services are more of a concern than price. As far as poor services go, the National Communications Authority (NCA) quarter three 2020 Quality of Service Report indicate that apart from Glo, which lacks coverage in several regions, MTN, Vodafone and AirtelTigo are all doing well in most parts of the country except in parts of the Volta Region and parts of Northern Ghana where they all recorded failures in QoS parameters in many communities. Details of that will be discussed on other write ups.

One thing is clear though, that great customer experience is not something that a service provider can claim to have achieved until the customer says so. It is entirely up to the customer to say what his or her experience is. A telco can make all the claims of having spent millions of dollars to put systems in place to give great customer experience, but the bottom line is, it boils down to what the customer says his experience is, and not what the telco claims to have spent. One customer may find MTN services sloppy and Vodafone services great, based entirely on his PERSONAL experience on the two networks. And another customer may find MTN great and Vodafone sloppy, again based on personal experience.

Leakage

But when it comes to data leakage, there are a myriad of factors beyond the control of telcos, that are responsible for leakages. Putting it all to some unproven allegation against telcos is at best lame. However, consumers are often quick to jump to the conclusion that once their data is running out fast, their service provider must be doing something on the customer’s blind side to take the data away. It defies logic for anyone to think, much less say that, in a highly competitive industry like Ghana’s telecom industry, a service provider would promise great experience and then turn round and INTENTIONALLY steal data from customers and give them sloppy service.

So, what are the key data thieves that telcos have no control over?

The second part of this article would discuss a number of factors that steal data from customers and briefly suggest ways to prevent the leakage.

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