Battling low sales and patronage, companies and businesses in the country confronted with the difficulty in accessing capital to expand and invest in their operations, due to the outbreak of the COVID-19 pandemic.

The coronavirus disease has had devastating impact on the global and local economy as well as businesses, squeezing capital to the private sector.

Financing of the private sector by banks and other financial institutions eased following the outbreak of the coronavirus disease late 2019, which can partly be attributed to the difficult global financing conditions, resulting from the COVID-19 pandemic.

Indeed, the expenditure of government in the economy, which is the biggest spender, reduced following the pandemic, because resources have to be channelled to the health sector to contain the spread of the virus and save lives.

The Bank of Ghana stated in the September 2021 Monetary Policy Committee statement that the  “Private sector credit growth has not fully recovered to pre-pandemic levels due to lingering supply-side risk aversion from the shock of the pandemic as well as slower-than-expected growth in demand for loans that are backed by bankable projects. Annual nominal growth in private sector credit slowed to 9.5 per cent in August 2021 compared with 14.3 per cent, in the corresponding period of 2020.”

Most of the banks in the 2020 financial year invested in government instruments such as Treasury Bills, thus squeezing the private sector of funds to expand their operations.

Encouragingly, one sector of the economy, which has not been severely impacted by the coronavirus in terms of sales and patronage, is the telecommunications sector, as there has been an increased demand for data due to online education and working from home.

However, the increased demand for data has necessitated the need for the telecommunication companies to invest more on Information Communication Technology infrastructure to enhance the capacity of the companies to be able to meet the growing demand for data, which placed a huge financial burden on them.

One company, which has invested heavily in the midst of the coronavirus is the telecommunication giant, MTN Ghana, a member of the Scancom Group, in spite of the company’s declaration as Significant Market Player (SMP).

But just as the company was grappling with the effects of the coronavirus disease on its operations, the National Communications Authority (NCA) on June 9, 2020, declared Scancom Ghana Limited, operators of MTN Ghana, SMP.

According to the NCA, MTN Ghana had been declared as an SMP because, it controlled more than 57 per cent share of the voice subscriber market and more than 67 per cent of data subscriber market.

NCA said the declaration of MTN Ghana as an SMP was in line with the mandate of the Authority under Section 4.3 of the National Telecommunications Policy, 2005, which states that “in the absence of an NCA determination of different standard in a specific case, SMP will be determined to exist for an organisation providing telecommunication services that controls at least 40 per cent of a relevant market segment.”

The declaration of MTN as SMP meant that the company, among other things, has to remove on-net and off-net price differentials, which means that there  should not be any difference in call and Short Message Service (SMS) rates between an MTN-to-MTN communication and a call/SMS from an MTN number to any number on the other networks.

Often telecommunication companies give cheaper on-net rates, via numerous bundles and promotions, so that customers will get more value when communicating with each other on same network; that way they are able to compete better against other telecommunication companies. But this SMP regulations means MTN is being asked to stop any such schemes.

Also, the SMP calls for the application of a 30 per cent asymmetrical interconnect rate for two years.

This means that, for the next two years, what the other operators have to pay MTN per minute or per text message for sending traffic from their subscribers to those on MTN would be 30 per cent less than the rate MTN pays to send traffic to those other networks.

In addition, MTN is supposed to have a price floor on voice, data, SMS and mobile money, which means MTN cannot do bundles and promos to give customers any price less than their stated default rate, until NCA allows it.

Moreover, MTN would have to submit every pricing plan or package to the NCA for approval before they can implement and if NCA says no, they cannot implement.

In spite of all these regulatory restrictions which have adverse financial implications on the company, MTN Ghana continues to invest in its operations and the Ghanaian economy as well.

In 2019, MTN Ghana invested 173 million in capital expenditure, $157 million in 2020, and 2021 the company projects to invest $207 million in capital expenditure.

From 2016 to 2020, the company had invested $800 million in capital expenditure and this means on the average from 2016 to 2020, the company every year invests $160 million in capital expenditure.

Aside the investment in capital expenditure, MTN Ghana through MTN Ghana Foundation, continues to invest in social projects to improve the lives of the citizens.

The MTN Ghana Foundation, has for the past 12 years, invested GH¢53.3 million in 152 social projects in the areas of education, health and economic empowerment.

As part of its Corporate Social Responsibility and efforts to combat the coronavirus, the company donated Personal Protective Equipment and other health essentials worth GH¢5 million to government and health institutions across the country.

Mr. Selorm Adadevoh, Chief Executive Officer of MTN Ghana, said the focus of MTN Ghana this year would be “the digital enabler for Small and Medium-scale Enterprises in the country.”

To this end, MTN Ghana would continue to invest massively in digital communications solutions, cloud services and business broadband.

“Our strategic priorities for 2025 are to build the largest and most valuable platforms, drive industry-leading  connectivity operations, create share value, and accelerate portfolio transformation,” Mr Adadevoh said.

The MTN Ghana CEO said MTN Ghana was currently partnering and exploring various partnership with government, to among others, support the GH¢100  billion Ghana CARES to prop the economy and support private sector overcome the effects of the coronavirus pandemic.

Mr Adadevoh pledged MTN Ghana would continue to invest in the company to improve communication services as well as in the Ghanaian economy to accelerate the development of the country.

MTN Ghana clocked 25 years this year and is celebrating the two-and-half decade programme on the theme “MTN Ghana – 25 Years of Brightening Lives.”

The Journalists for Business Advocacy (JBA) believes the continuous investment of MTN Ghana in the telecommunication market, has helped to “democratise” communication, where people can now communicate with their loved ones around the country irrespective of their location, unlike the past where people had to queue.

The Journalists for Business Advocacy (JBA) is a non-profit media advocacy group that advocates a cordial and standardised operating environment for businesses in Ghana.

The group also provides a potent platform for Small and Medium-scale Enterprises (SMEs) that bring to the fore the sector’s contribution to national development as well as challenges to enhance growth.

JBA said the huge investment MTN Ghana has made in Mobile Money in the past decade has deepened financial inclusion and access to financial services.

Established in 1996 as the Global System for Mobile Communications (GSM) operator with 20 employees, the company acquired a 3G licence in 2009 as well as launched Mobile Money Service.

In 2081, MTN Ghana listed on the Ghana Stock Exchange through an Initial Public Offer, to allow Ghanaians to own shares in the company and acquired a 4G in 2019.

Writer’s email: gbetomenyo81@gmail.com

(0246943864)

BY KINGSLEY ASARE