BMI View: The NCA's plan to license MVNO players in Ghana's already crowded mobile market will push price competition to unsustainable levels. This will encourage operators to seek further cost efficiencies and could trigger consolidation among the smaller players. In January 2015, Ghana's National Communications Authority (NCA) has invited applications for three new telecoms licences in the country. The authority will award a mobile virtual network operator (MVNO) concession, a fixed access service of a unified access service licence and an international wholesale carrier (IWC) licence.
The Ghanaian mobile market grew by 2.2% q-o-q and by 8.3% y-o-y in Q414 to reach 114.7% market penetration.
The mobile data market grew by 2.6% q-o-q in Q414, yet 53.1% growth y-o-y due to strong first and third quarters in 2014. The market is driven by expanding network coverage, falling tariffs and the availability of low-cost smartphones.
The wireline market remained nearly unchanged and contracted by 3.7% y-o-y to reach 260,407 wirline subscriptions in Q414. The market had been contracting for six consecutive quarters before, indicating that fixed-to-mobile substitution is gaining pace.
Ghana dropped one place to fifth position in BMI's Risk/Reward Index table. Ghana's best score is in the industry rewards category, reflecting the limited state interest in the telecoms sector and the high level of regulatory independence in the country. The country's lowest rating is still in the Industry Rewards category, where it is held back by increasing market saturation and strong downward pressure on ARPUs despite increased penetration of mobile data services.
Key Trends And Developments
Mobile money platforms in Ghana have skyrocketed with MTN leading the charge. MTN has registered 18.5mn monthly transactions in August 2015, compared to just over 5mn in August 2014. Growth will continue in the mobile money sector and regulation of this mushrooming sector is bound to happen in the months ahead.
Ghana's National Communications Authority (NCA) created three new licensing categories. The NCA opened a public consultation on the proposed new licensing framework with a deadline of December 8 2014. The new categories, which BMI understands will complement existing mobile network operator licences, are: Fixed Access Service Licence (fixed telephony, broadband and other value-added services); Wholesale Carrier Services; and, Mobile Virtual Network Licence (MVNO). In January 2015, the NCA has invited applications for three new telecoms licences in the country. The authority will award a mobile virtual network operator (MVNO) concession, a fixed access service of a unified access service licence and an international wholesale carrier (IWC) licence. BMI expects the regulator's goal in introducing MVNOs into the market is to further reduce the cost of telecommunications services for consumers. However, we believe this will exacerbate operating challenges in Ghana's already highly fragmented mobile market.
In March 2015, Ghana's National Communications Authority (NCA) has confirmed that the country is unlikely to meet the June 2015 deadline for the switchover of analogue broadcasting to digital terrestrial television. In April 2015, it has shifted the deadline for the migration from analogue broadcasting to digital terrestrial television to February 2016. The delay has reportedly been caused mainly due to financial constraints. The NCA is yet to reveal a new timeline for the completion of the switchover. The June 17 deadline was set by the International Telecommunication Union (ITU). In February 2015, Chinese pay-TV service provider StarTimes has sued Ghana's communications ministry over what it described as unlawful termination of its digital migration contract. StarTimes was selected to supply and install the Digital Terrestrial Television network platform for the country. However, the ministry claims that the firm failed to secure the required financing from the Export and Import Bank of China to implement the project. The firm has filed a lawsuit, seeking an injunction on the government's move to revoke the contract.
The Ghanaian government announced in its 2015 budget that it would remove taxes on all imported smartphones by 2015. The government has taken the decision to increase smartphone penetration in line with its policy of bridging the digital gap within the country. Only 15% of the country's population have a smartphone as taxes make up more than a third of smartphones' cost in Ghana, according to Alliance for Affordable Internet's Executive Director Sonia Jorge.
Blu Telecommunications has partnered Huawei Technologies to roll out a wide range of telecoms services using 4G LTE technology in Ghana. The collaboration will allow Blu Telecommunications to provide high-speed and reliable data, voice, Wi-Fi and video on demand services to residential and business subscribers. Blu will also offer Huawei 4G modems, mobile WiFi and CPE.
|Data Drives Growth|
|Sources: BMI, Operators|