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Business News of Thursday, 24 November 2016

Source: Samuel Dowuona

Vodafone: Election year will not stop our investments

Businesses in Africa usually slow down on their investments in election year for security reasons, but Vodafone Ghana Boss, Yolanda Cuba said the company is still investing aggressively this year in spite of the elections which is just in two weeks.

She told a gathering representative from civil society organizations, telecom executives and senior journalists that Vodafone does not expect any significant change in the business environment no matter the result of the elections so they have not cut back on their investments.

"Whether the sitting government is retained or there is a change in government we do not see that affecting our investments in any way any in the short-term so we do not see why the election should determine our investment program," she said.

Yolanda Cuba explained that Vodafone is driven by its commitment to helping grow the Ghanaian economy much more than who wins or loses the elections.

"We have invested over US$1.7billion in Ghana since 2008 and we not going to go on investment strike because of an election - Ghanaians need our services and we will not disappointment them," she said.

Indeed, the interactive forum with civil society and journalists was part of strategies to chart a path on how telcos could collaborate with civil society to make the telecom industry better in terms of the regulatory environment and service quality.

ICH

Cuba told the gathering one most challenging feature of the regulatory environment is the official intermediation in the form of the Interconnect Clearinghouse (ICH), which seeks to solve what she described as a "non-existent problem" and threatens to raise telecom tariffs for the consumer.

She explained that telcos continue to interconnect smoothly without the ICH and are able to bring tariffs down year after year; but once ICH kicks in, there will be an increase in operational cost and that would at least make it difficult for telcos to reduce tariffs as they have always done.

"The ICH operator will make capital investment and that cost will be borne by telcos and eventually by our consumers," she said.

"This is what worries me most about the telecom industry in Ghana because I can't fathom how a regulator which claims to be pro-consumer would continuously introduce policies that threaten to erode benefits to the consumer," she added.

Cuba noted that things would even get worse when it comes to interoperability between mobile wallets, when the cross-wallet transactions would have to go through ICH and thereby bring an additional service charge to consumers.

4G spectrum

The Vodafone Ghana Boss said another move by the regulator, which was not in the interest of the consumers was the pricing of 4G spectrum.

She said the pricing of the 4G spectrum at US$67.5million automatically cut out all other operators in favour of one, which is currently the only profit-making telco in the country.

"Government holds 30 per cent shares in Vodafone so we give our financial statement to the regulator every month and they know what we can afford and what we can't afford. So for them to price the spectrum that high knowing only one operator can afford it still baffles my mind," she said.

Yolanda Cuba said even if the spectrum had been priced half the price it was pegged at, even Vodafone, as the second biggest operator, could still not have bought it.

She is of the view that since spectrum is a necessity for the public like water is, the price should have been moderate so that many more telcos could have afforded it and deployed for the greater majority of Ghanaians to have access to 4G LTE, then the benefits would accrue to the state gradually.

"I also think the Broadband Wireless Access (BWA) players like Surfline, Blu and others should have been made to collaborate with the telcos so that they can be sure of funds to deploy nationwide and guaranteed returns on monthly basis. But as it is now the BWAs have serious challenges deploying, while Ghanaians are denied access," she said.

Yolanda Cuba is however hopeful that the regulator would soon sell the remaining 4G spectrum for less so that Vodafone could also get into that space and give more Ghanaians the opportunity of better service.

She said the alternative would be for government to amend the existing regulation and allow telcos to re-farm 2G and or 3G spectrum and use for 4G.

No profitability

Again, on the issue of profitability of the industry, she noted that Vodafone in particular, continues to borrow from government, external sources and from its mother company, and that comes as cost that eventually depletes it revenue, leaving it with no profit after tax to declare.

"There is a huge debt from the past and we are still repaying so we have not been able to declare real profit after tax," she said.

The Vodafone Boss is hopeful that civil society organizations would get interested in what happens in the telecom industry and raise the right issues about service quality as well as policies that will help grow the industry.

Some of the participants at the forum raised issues about poor network quality and unsolicited communication from Vodafone and its Value Added Service (VAS) partners. In fact some threatened to sue if the unsolicited communication does not stop.

NCA

Meanwhile, on the issue of ICH, the regulator, National Communications Authority have always argued that it will bear the operational cost of the ICH so that will not lead to increase in tariffs for the consumer.

The NCA actually stated that any telco which increases tariff because of ICH would have to explain how the ICH contributed to the increase in tariffs.