Ghana’s telecom industry is set for a shakeup as the National Communications Authority (NCA) prepares to regulate how often Mobile Network Operators can adjust their tariffs.
This move comes specifically in response to the dominance of MTN Ghana as a Significant Market Power (SMP) in 2020.
Traditionally, the NCA has allowed mobile network operators to set their prices.
However, MTN’s market share, exceeding 75% across voice, data, SMS, mobile money, and revenue, has triggered intervention under Section 25 of the Electronic Communications Act (Act 775). This section empowers the NCA to regulate prices when a single dominant player exists or engages in anti-competitive practices.
The NCA had previously accused MTN of violating SMP rules by offering lower-priced data bundles compared to competitors. These practices raise concerns about potential predatory pricing to drive smaller players out of the market.
Indeed, in February last year, NCA reported that they saved the non-significant market power operators about 30% of the money to be paid to MTN for asymmetrical interconnect asymmetrical interconnect fees of about GH¢86.6 million.
This the NCA intends to help in correcting the market imbalance.
Meanwhile, the NCA had published draft guidelines for public comment.
Key points include:
Preventing Undercutting: Significant Market Power or dominant operator will be prohibited from offering the lowest prices for any service, preventing them from squeezing out competitors.
Capping Price Advantage: Significant Market Power or dominant operator prices cannot exceed those of other operators by more than 10%, ensuring fair competition and preventing exploitation of its dominant position.
Prior NCA Approval: Significant Market Power or dominant operator must seek NCA approval before changing tariffs, allowing for assessment of potential impact on other operators.
Limited Price Increases for Others: Non-SMP operators can adjust prices without prior approval but require NCA authorization if their proposed price exceeds Significant Market Power or dominant operator.
The NCA emphasised that these guidelines align with international best practices to ensure fair, reasonable, and non-exploitative pricing, particularly from Significant Market Power or dominant operators.
Public feedback is also crucial to shaping the final regulations. Ghanaians have until March 8, 2024, to submit their comments.
While the NCA attempted to level the playing field, questions still remain. Previous efforts, like saving non-SMP operators money on interconnection fees, have yet to translate into improved services or increased market share.
The effectiveness of these new regulations will depend on the NCA’s enforcement capabilities and the non-significant Market Power investments in network quality.
Source: Myjoyonline
