Ghana records over 55% mobile data penetration

Six voice/data service players and three data service player with voice licenses

The latest mobile cellular subscriber base figures for the period ending August 2014, indicate that mobile data subscribers in the country now account for almost 50% of total number of mobile phone lines and over 55% of Ghana’s population.

As at the end of August 2014, the total mobile subscriptions in the country was 29,531,488, while total data subs also reached 14,615,048, which is 49.5% of the total.

Meanwhile, at August ending, the country’s population was estimated at 26,566,240 so the number of mobile data customers constituted 55.01% of the population.

The figures, as published by the National Communication Authority would show that mobile data penetration has been rising steadily from 48.84% in February 2014 to the current level. It experienced a dip from 54.09% to 50.85% between April and May. Then from July to August it fell again marginally from 55.71% to its current 55.01%.

In terms of real figures, mobile data customers fell from 14,254,407 in April to 13,429,399, then rose to through June and July to 14,771,074 before falling marginally to 14,615,048 in August.

MTN

Market leader MTN’s data subs level towers high above all else at 7,763,273 data subs, representing 53.12% of the total data market share, and 29.2% of Ghana’s estimated population as of August ending.

This means MTN’s data customers are more than the data customers of all the five other telcos combined. But it is important to note that the figures does not include customers of Surfline, which launched in September.

Meanwhile, MTN’s total number of customers at the end of the same period was 13,541,961, so its data customers constituted 57.3% of its total customer base. But the August figure is not the highest for MTN. Data customers of MTN was highest in April 2014. The figure was 7,986,231, which is 222,958 more than the August figure.

MTN has been promoting affordable smartphones and affordable data packages on its network, and the telco attributes the consistent increase in data customers and data revenue to that. Indeed, in the half years report of the MTN Group, MTN Ghana recorded 180% increase in data revenue and data contributed 17.6% to the total revenue of the company.

Vodafone

Vodafone also finished August 2014 with 2,067,705 data customers representing 14.15% of the total data market share, and 7.8% of Ghana’s population. Vodafone’s data customers also constitute about 31% of its 6,688,783 total subs base.

Data customers on Vodafone’s network peaked in June 2014. It stood at 2,542,931 before dropping to the current level.

Vodafone has for a while ridden on the back of its Red package, which offer various bundles that included data, voice and SMS packages all in one. The Red packages were touted as the main driver of data customer uptake for Vodafone, but the latest figures do not uphold that claim any longer.

Vodafone has not been promoting any affordable smartphones aggressively on its network like the market leader MTN does. Weeks ago, it launch the Alcatel Onetouch Alpha Idol, which is selling at over GHC1,300, but with a data package from Vodafone. It followed that up with an even more expensive handset, the iPhone 6, which is estimated at about GHC5,000.

This runs contrary to what the GSMA Intelligence recent report said about what currently drives data customer uptake and consumption, i.e. low end smartphones and affordable data packages.

Vodafone has been touted as elitist but it insists it is a “premium” network focusing more on enterprise and high-end customers than the low end.

Tigo

Tigo’s data customers have been increasing throughout the year. Between July and August, it increased by 56,248, and now boasts of 2,097,558 data subs, representing 14.4% data market share.

Its data customers constitute 52.2% of its 4,015,946 subs base as of August ending. The figure also represents 7.9% of Ghana’s population.

So even though second place Vodafone has more customers than third place Tigo, the latter’s data subs are more than that of the former.

Until Glo recently introduced a 24-hour bundle for 25Gp, Tigo had the most affordable data packages in the country. It used to have three unlimited data packages. But that was when it did not have a good spread of 3G cell sites across country. Now Tigo is close to finishing the installation of 3G cell sites in all district capitals and it is already increasing data subs consistently monthly.

Tigo also does a number of affordable smart devices in collaboration with some dealers like Tecno, Alcatel Onetouch and others.

Airtel

Airtel gained 36,897 new data customers between July and August to reach 2,066,155 data subs, representing 14.14% data market share, and 7.8% of Ghana’s population.

It data customers also represents 55% of its total customer base of 3,756,547 as of August ending this year.

Airtel was the first to start advertising a 3.75G network, promising a robust and reliable network support for great data experience. That seem to have worked for them and now the company has one of the highest data subs to general subscriber base ratios in the country; second to only MTN.

Glo

On the data front, Glo also made gains. It added on 86,227 subs between July and August, and finished the period with 584,222 data subs, representing about 4% of total data market share.

Glo’s data subs constitute 2.2% of Ghana’s population and 41.6% of its number of customers, which stood at 1,404,426 as of August 2014.

Glo had, what some of its customers described as, one of the most complex bundles on the market. It was called the Glo Bounce, and it offered packages that customer claimed were difficult to understand because the tariff on those bundles different at different time of day, week and for different reasons.

There were different charges at night, early mornings, peak hours, and on weekends. And sometimes what the customers paid depends on how much he/she spent over a given period of time.

Pundits have said the packages did not yield much result for Glo because of its complex nature, even though it may have been one of the most affordable bundles on the market.

But recently, Glo launched three new daily packages, offering a 24-hour bundle for as low as 25Gp, which is currently the most affordable on the market. But Glo is not offering any affordable handsets on its network.

Expresso

Meanwhile, Expresso, which has been losing customers consistently for more than a year, made a marginal turn around, increasing voice subs from 122,356 in July to 123,825 in August 2014. But its data subs dropped by more than a thousand to 36,135.

The figure represents 29.2% of its total subs base, 0.14% of the population and 0.25% of its own total data market share.

Expresso had one of the dongles, CLIQ, which arguably gave the best mobile data experience in the country. But now user say they would rather do data on another network than on Expresso with the CLIQ modem.

Meanwhile, mobile data penetration promises to increase because he first 4G LTE network has started operations and the second one is gearing up to launch this month.

A third and possibly a fourth licensed entities would launch much later.

Nine Licensed Telcos in ‘little’ Ghana – Part Two

Six mobile voice/data players and three data service players with voice licenses

The second part of this article looks at whether the 4G players would also sell to multinationals, and also touches on the challenges the cedi depreciations poses to the new entrants and whether population size played any role at all in the decision to license nine telcos in Ghana.

Will the 4G LTE operators also sell?

It has been established that five mobile licenses were given to Ghanaians or companies with Ghanaian involvement, but they are now in the hands of foreigner largely. Glo is for a Nigerian, and so far it is only the BWA licenses (4G LTE operators) which remain firmly in the hands of Ghanaians. But given the kind of muscle needed to sustain a telecoms service and make it profitable in this harsh economic conditions and highly competitive market, one wonders how long the Ghanaians would hold on to the BWA licenses without the help of multinationals.

John Taylor is the man behind Surfline, and he recently said after paying US$6million for the BWA license (which he described as expensive even though NCA thinks it is cheap), he has spent over US$100million dollars to build the network to cover only Accra and Tema. And according to him, “we are still spending.” Meanwhile, he has more than 100 districts capitals in nine more regions to cover.

Unlike the other networks, which had coverage beyond Accra at the time the multinationals came in, Surfline started from scratch with coverage in Accra and Tema, with just about 220 cell sites, which makes it the biggest 4G LTE network in Africa right now. But pundits say 220 cell sites are still not enough to cover Accra, as the existing networks are each using up to 450 cell sites in Accra alone, and are still having problems providing excellent service. Indeed some Surfline customers complain of “no coverage” in some parts of Accra.

Blu is set to launch soon but it is not clear how much they have invested in building their network after paying US$6million for the license. Blu CEO Emmanuel Collision recently told journalists “we raised millions of dollars locally and invested in building our network.” Blu is still running tests prior to the launch in small communities in Accra; grow gradually to cover the whole of Accra before even thinking about going outside the capital. The reason is admittedly cost. Goldkey has not even turned on their golden key yet. They have remained virtually silent on what they intend to do with their BWA license.

Dollar Depreciations and Competition

The other challenge facing the BWA licensees is that after acquiring licenses at US$6million and investing several millions of dollars into building their networks, Ghana’s currency has depreciated so heavily just at the time they are about starting operations. This might mean they now have to make twice the effort to recoup their investment. And that is not going to be easy in the face of the stiff competition from six traditional operators and several other existing ISPs, which are already complaining of dwindling revenues. Pundits say the BWA operators must necessarily be affordable to remain competitive. But experts say that would not sit well with them, if they have to recoup the heavy dollar-based investments they have made so far. Moreover, there is another 4G LTE player, Yoomy, preparing to enter the market through a local partner. They already have an ISP license on 2300MHz frequency.

Secondly, there are not many 4G devices that would drive consumption of 4G LTE. The few 4G devices available are not affordable; and mass consumption, which means affordable devices are key to the profitability of the 4G operators. Surfline is currently giving free devices (dongle, Mi-fi and Router) for each data bundles purchased. But the limitation is they, like the other BWA licensees, are limited to data service for now. They cannot provide voice services. And so even though affordable handsets for 2.6GHz LTE do exist, Ghana’s 4G operators have no use for them now.

So the question on the minds of pundits is, would the LTE guys also sell like the other six did because of the huge cost involved in providing telecoms service, plus the pressure of competition in Ghana, characterize by seven active operators with two more to come in a relatively smaller population like Ghana?

That question is more relevant because, despite the obviously huge profitability telecoms promises, banks in Ghana have not done well in supporting locals to invest in the industry and keep Ghanaians in the mainstream. The banks are quick to advance loans to foreign companies in the industry. So there is a doubt as to whether the Ghanaians in the industry now will remain in there over the next five to 10 years.

Telco-population analysis

So effectively, there are now nine licensed telcos in a relatively smaller populations like Ghana. It would appear that the NCA and government for that matter, was more focused on raising money into the consolidated fund, than considering the size of the country’s population in awarding the licenses. They did not appear to have considered the profitability of the telcos, which would then make them able to expand and provide service even in areas that offer very low average revenue per user (ARPU). Government’s strategy seem to have been focused on quantity rather than the profitability of the investors.

But the NCA has often argued that if Ghana was not a profitable telecoms market, as some often argue, how come the multinationals kept trouping to Ghana even though there were other multinationals already in the Ghanaian market?

So more licenses have been given out with the hope that service would be expanded to the “unserved and under-served”, but that has not necessarily happened without the intervention of a universal access program run by the state-owned Ghana Investment Fund for Electronic Communication (GIFEC). The same telcos, which complain of dwindling revenues due to competition, pay one per cent of their profits every year into the universal access fund. And GIFEC claims it is investing the fund properly, but the telcos privately raise questions about the use of fund.

Figures from the Ghana Statistical Service indicates that when Mobitel was licensed in 1990, Ghana’s population was estimated at 15.04million; then Celltel came in 1993 when the population was estimated at 15.431million (plus 391,000). Spacefon came in 1995 when population was estimated at 16.23million (plus 799,000); Onetouch came to meet a population estimate of 16.644million (plus 414,000) in 1996; Westel came 1997 when population was 17.07million (plus 426,000), and Glo came in 11 years later in 2008, when populations was 22.532million (plus 5.462million).

Now there is Blu, Surfline, and Goldkey here from June 2013 when population was estimated around 26.43million. So within the 23 years from Mobitel to the BWA licensees, Ghana’s population has increased by 11.39million. So for the additional 11.39million people, there are at least six additional telcos. And all of them have licenses for nationwide coverage. And while rural coverage is still not the best, urban dwellers seem to have more than necessary number of telcos to choose from.

Other jurisdictions

Indeed in countries where lots of telcos have been licensed, some of them have licenses to cover only smaller communities rather than nationwide. In Nigeria, for instance, where the population is estimated at about 170 million, only four telcos have licenses to go nationwide; MTN, Etisalat, Airtel and Glo. There are five other smaller ones. But that is understandable in the population of 170million.

In India, the population is over 1.27 billion and they have 13 telcos, plus a few others which are limited to covering smaller communities. In fact one of the supposed nationwide coverage license holders in India, T24 Mobile has 0% market share. Recently some telcos folded up in India because of non-profitability.

United Kingdom is a more advanced economy with a population of over 64million. It has five major telcos with nationwide coverage, BT (British Telecom – fixed line service), Vodafone, EE (everything everywhere), O2 and 3 (Three). But there are 43 MVNOs (mobile virtual network operators), which are limited to specific coverage areas.

United States has four major nationwide telcos in a population of over 320 million. The telcos are AT&T, Verizon, T-Mobile, and Sprint. There is a fifth nationwide operator called US Cellular, but it is virtually non-existent. There are smaller telcos in the US, which are limited to smaller coverage areas by license. And there is hardly any complaint about dwindling revenues for telcos in the US and in the UK, because the populations are big enough to accommodate a certain number of smaller operators with limited coverage areas.

But Ghana, with an estimated population of 27million, has seven active telcos with two more yet to launch. And all have nationwide coverage licenses. It is therefore not a surprise to find telcos in Ghana complain of dwindling revenues and possible mergers. Indeed, some former officials of NCA have said in public that eventually just about four or five telcos would stand in Ghana. And that day seem to be fast approaching as more telcos get into the system and threaten to even neutralize revenues further.

India is a typical example of where telcos revenues dwindled so much, they started increasing call rates and some telcos simply folded up recently. Ghana has also started experiencing increases in call, SMS and data rates. And some argue the telcos might become a cartel as a way of surviving the harsh conditions; stiff competition, no-mercy regulator and some unfriendly citizens who cut telecom fibre and steal cables, fuel, batteries and other equipment at telcos’ base stations.

So the question still remains, that in ‘little’ Ghana with nine licensed telcos, faced with dwindling revenue, would some telcos fold up soon or merge with others as predicted – would the new entrants also sell to multinationals or partner with foreigners because of the cost of sustaining telecoms network in such harsh economic conditions and competitive market, or would the banks be bold to support the locals to survive – and lastly, with the threat of dwindling revenue, would any multinational be willing to come into Ghana and partner with startups like Surfline, Blu or Goldkey, even if any of the three want foreign partners in the future?

Ghana’s MVNO Candidates Roll Call

Ghana’s telecom industry will soon have MVNOs (mobile virtual network operators), which will be additional telecom operators issuing their own SIM cards with different brand names. But they will sit on the infrastructure of existing mobile network operators (MNOs) or telcos, and provide service with the support of the MNOs at a cost.

The MVNOs will buy capacity at wholesale price from the MNOs/telcos and retail them to customers, pay off the MNOs and keep their profits. So they will have standing agreements with the telcos for the supply of capacity and certain services in their mutual interest.

There may be different business models depending on which MNO is dealing with which MVNO, but essentially the MVNO will get capacity at wholesale price, sit on the infrastructure of the MNO, issue its own SIM cards, render service to its own customers and pay the MNO for the service support.

When the National Communication Authority issues the MVNO licenses later this year, they will come at a cost to the licensees. In June 2013, NCA issued three Broadband Wireless Access (BWA) Licenses for for US$6 million each. Glo was reported to have purchased a combined 2G/3G license for US$50.1 million in 2008. That gives an idea of how much telecom licenses cost in this country.

MVNO licenses in India were issued in 2010 for a whopping US$17 million plus each. But India has a population of over 1.7 billion, which presumably provides any MVNO the huge opportunity to reach out to millions of unserved and under-served persons with mobile telecom services. But even in that opportune environment, some MVNOs and even MNOs recently came crashing down and out of the market due to non-profitability.

Ghana has a population for over 27 million so proportionately, one would expect MVNO licenses in Ghana to cost something within the region of US$2 million to US$3 million. But in order to encourage Ghanaians from getting into the MVNO business and participating in the local telecom industry, the country is likely to issue the MVNO licenses at giveaway prices when the time comes. The price is likely to be in the region of US$1 million and US$1.5 million per license, which is just about 50% of what the actual price could have been.

So at that price, who are the most likely Ghanaians to go for these licenses and bring some local content to bear on the mainstream telecom industry?

Simcardblog has a few names, which naturally pop up for anyone who follows events and personalities in this industry. Each of these possible MVNO candidates would be discussed in brief, in terms of their background/experience, and what they are likely to bring on board.

Kofi Kludjeson

The first on the list is Prince Kofi Kludjeson. He was the first Ghanaian to have ever single-handedly receive a mobile telecom license in Ghana. The telecom license given to Millicom Ghana went to a local and a foreign partnership. But Kludjeson’s company, Celltel Ghana Limited was wholly Ghanaian owned.

Kludjeson moved on from there to become the first person to run an MVNO in Ghana on Tigo’s network. It was called Alltel Ghana Limited. There were issues of licensing with that company, but the point here is that he has experience and that put him on top of the list as someone who would love to do it again.

George Andah

Everybody who has followed the telecom industry in Ghana would agree that one of the people who made the industry tick when they were in it was George Kojo Andah. Much of the buzz about MTN, when they took over from Areeba could be credited to the aggressive and passionate marketing style of George and his team. In fact when George was at MTN, many of those who did not know his actual position then, thought he was the CEO. He lived and drove the brand with passion, coloring his beard yellow when he had to.

George did not stop there, he moved on to Airtel Nigeria for one year, still driving a telecom brand; then to Glo, where he became the first Head of Business (CEO) for Ghana at the launch of Glo. In fact Glo was more in the face of the Ghanaian public from the onset when George was the Head of Business than now. He may have left Glo and the mainstream telecom industry, but Simcardblog is convinced he is one of the top candidates for an MVNO license. George now heads Rudder Solutions.

Fuoad Chalabi

Closely on the heels of George Andah is Fuoad Chalabi, who was the first Head of Marketing at Spacefon (now MTN). He moved on to establish V-Mobile, which continued to do business with MTN, particularly in the area of customer reward promotions. V-Mobile is also the sole agent for LG Phones in Ghana among other things.

Even though Fuoad left Spacefon/Areeba, his presence in the telecom industry is still felt because of business with MTN and other players in the industry. It would not be surprising to see him back into the mainstream through the MVNO window.

Philip Sowah

Philip Sowah recently left Airtel as Managing Director. He exited in the most glorious way as the Telecoms CEO of the Year at the last Ghana Telecom Awards (GTA). He was the first to have won that award when the GTA took off a few years back. So that was his second, and what a moment to win it again.

Prior to Airtel however, Philip was the Managing Director of Ghana Telecom’s mobile service, Onetouch (now Vodafone), where he left to join Zain (now Airtel), when they first came into Ghana to start Ghana’s fourth GSM network. Philip led the company to start the first 3G network to have provided coverage for Accra and beyond. MTN started 3G but confined it to a small space within their Osu office. But Philip took the bull by the horn and showed the way. It was therefore only natural that, under him, Airtel was first to go 3.75G.

Philip left Airtel with a firm promise to Simcardblog editor, Samuel Dowuona saying “I am not going anywhere – I will still be around – in fact you will see me back in the industry very soon.” Does that sound like another MVNO in the offing? We live to see.

Kwesi Amoafo Yeaboah

One other IT/Telecom expert who has made a statement about his desire to be a major player in the telecom/ICT industry is one time politician, Kwesi Amoafo Yeboah. Kwesi run as independent presidential candidate in 2008. Prior to that he had partnered millionaire Kofi Amoah to bring Western Union Money Transfer system to this country, which was actually the first in West Africa.

Following the unsuccessful political career, Kwesi has been concentrating on a number of businesses he started in the IT and telecom space. He keeps adding on new services and platforms to give Ghanaians new ways of using the internet and telephony to achieve more. Kwesi recently started a Wi-fi hotspot service in parts of Accra, and plans to grow it over time.

If anybody was a possible candidate of an MVNO license, Kwesi is one.

Beyond the five listed above there are some very tough players within the mobile Value Added Service (VAS) space, who could also be possible candidates for MVNO licenses, given their clout and impact on individuals and businesses of all shapes and sizes, from Club 100 corporate entities to SMEs.

Between these guys, they are providing services through the platforms of telcos to about 80% of the customers of the telcos in the country. The six telcos together command almost 28million telephone lines, so the VAS guys are serving something in the region of 24 million out of these lines. Plus, they serve corporate bodies too.

Top on the list in that space are TXTGhana, SMSGH, Mobile Content and Rancard Solutions. Between these four, they command about 22 million out of the estimated 24 million lines on the various VAS platforms. So who are the possible MVNO candidates behind this dynamic mobile VAS industry?

Nii Sodza Laryea, TXTGhana

Nii Sodza Laryea is CEO of TXTGhana, the multiple award-winning VAS provider at the GTAs and other award schemes. TXTGhana boasts of the largest independent proprietary messaging switch connected to all mobile network operators in Ghana including the Vodafone Fixed Line Network. Its total message processing capacity currently stands at 12,000 messages‑per‑second and a total IVR processing capacity of 450 calls per second on all mobile networks in Ghana.

TXTGhana is equipped with a state‑of‑the‑art back‑end infrastructure that provides for the rapid deployment of third-party mobile products and services, the activation and continued management of third-party products and services and the rapid deployment traffic monitoring and reporting tools in real time. Its main service areas are Enterprise Mobility Solutions, Customer Relationship Management, Mobile Advertising and Social Media Management.

Obviously, this is a perfect local candidate for an MVNO license.

Alex Adjei Bram, SMSGH

There is Alex Adjei Bram, General Manager of SMSGH. Beside the wide range of mobile VAS service it offers to a whopping 14 million customers, SMSGH also runs a website that integrates several electronic payment platforms. The website is called MPower payments, a multiple award winner, and it is already boasting of millions of transactions within less than two years of being launched.

Alex is obviously well placed for an MVNO license. Alex works with a team of IT sharks, who are more than ready to man an MVNO, leveraging on their experience and expertise. SMSGH has operational licenses in Nigeria and Cameroun in West Africa, and Kenya in East Africa. We think they are set for the MVNO license.

John Tottoh/Jimmy Allotey, MobileContent.Com

John Totoe and Jimmy Allotey are partners at Mobile Content.Com Limited and the CEO there is Conrad Nyur. This is a formidable team, which has delivered some of the top and exciting VAS platforms and products, plus great apps that are relevant to people not only in Ghana but elsewhere.

Mobile Content is the preferred link for music, sports, news, games, health, inspiration and more, on mobile telephony. The company’s services build a crucial link to entertainment and information for mobile users and it has continuous pioneered lifestyle changing mobile-based products in Ghana and selected West African markets.

For instance, Mobile Content’s Cards Café is being used by over 100,000 people around the world, and it continues to launch many more apps like MyZone, Hola, StreamGH, Access Accra among others. The company did the aggregation for the recent pre-World Cup Campaign Promo. That is the weight of local VAS companies like Mobile Content, which clearly shows they have the muscle for an MVNO when the roll is called.

Kofi Dadzie, Rancard Solutions

CEO of the recently sold Rancard Solutions, Kofi Dadzie has also been tipped to go for one of the MVNO licenses. Rancard has been a major VAS players. It recently sold some shares to Intel and it now has some cash to do other things. MVNO might just be one of those, and they have the skills, experience and expertise to deliver on such as venture.

David Poku and his Afriwaves were alleged to have been listed as one of the candidates for the single Interconnect Clearinghouse License. Whereas that is yet to be confirmed, some industry players have tipped him as a possible candidate for an MVNO license instead. Time will tell.

Ishmael Yamson Jnr heads Nosmay Consulting, another major player in the VAS space. Ishmael is actually the President of WASPAG (Wireless Application Services Providers Association of Ghana). They are a group of about 20 licenses and registered local VAS providers with international reach, set up to ensure self-regulation and sanity in the systems. Yamson, according to other industry players, has paid his dues and is completely qualified for an MVNO license.

Kenpong Group

Last but not the least is the Kenpong Group. It is also considered a possible candidate given their impact in the area of telecom infrastructure installation all over the country. Kenpong is believed to be in a position to run a small network on any of the installations he contributed to. Simcardblog would not be surprised if Kenpong decides to move from the periphery to the mainstream.

The beautiful thing about it is that all these companies and personalities are Ghanaians, who developed solutions on the local telecom platforms but have become globally relevant.

You may have more possible candidates in mind. Just name them. And please tell them that if there was anytime they need to look for MNO partners, this is the time. Anyone seeking MVNO license would first have to present their MNO partner to the regulator before they can get one.