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In Search Of Stronger Telecom Regulator
A GNA Feature by Samuel Dowuona

Accra, March 17, Ghanadot/GNA - Within the past few months the mobile telecom industry in Ghana has witnessed some flashy developments. But those developments have not necessarily improved network quality. As operators make huge showy expenses purporting to be bringing some hi-tech and luxury services to their customers, subscribers continue to experience a myriad of age old network challenges such as dropped calls; cross calls; speech mutation; calls not going through; wrong voice prompts; no network access; error in connection and more.


The network operators claim they are spending huge sums on network infrastructure by the day and yet subscribers of the big operators in particular continue to lose money instantaneously as a result of network challenges.


Available evidence shows that those operators are largely preoccupied with jumping at every opportunity to promote their corporate brands through aggressive marketing and PR strategies rather than fixing their sticky networks.


It appears that the big telecom operators in Ghana are generally advertising their features and not addressing the issue of service quality. Subscribers are at a loss as to what the National Communications Authority has been doing to ensure that operators delivered on their licence obligations to subscribers.


The Minister of Communications, Mr Haruna Iddrisu has said that there was an urgent need for a “stronger regulator” to ensure a vibrant telecom industry. In the 2009 Budget Statement, Government said it would monitor both the regulator and the operators to ensure sanity.


But Mr Joshua Peprah, Director, Regulatory Administration of NCA, says “to make NCA stronger it should be respected as independent of government interference in the area of policy implementation or should be minimal”.


The purpose of this article is to put the spotlight on some developments in the mobile telecom industry and the NCA’s positions on those developments.

This is to demonstrate whether the NCA is showing enough strength in regulating the industry.
The issues in focus are poor 2G network quality vis--vis the introduction of 3.5G services; statistics reporting vis--vis second network codes; street hawking and mobile number portability.

Network Quality


Within the month of January 2009 alone, Zain and MTN launched 3.5 Generation (3.5G) services. Vodafone Ghana also signed a US$120 million contract with Huawei for the supply of 3.5G technology. Tigo and Globacom have also received separate licences from the NCA to run 3G services.

Simply put, 3G is based on a Universal Mobile Telecommunications System (UMTS) and it enables subscribers to transmit data including pictures, video and greater volumes of text at a higher speed on their phones.


It enables video calls, video conferencing and offers permanent internet connectivity on the handset. 3.5G is a relatively minor upgrade to 3G.
The NCA argues that “in essence, where 2G services needs to be improved, adding a 3G network services can be another viable way of redeeming the situation.

” In other words the operators with poor quality service on 2G GSM networks are expected to correct that through 3G.

The NCA, however, blames the poor quality of service on “the resistance of local community groups to building of telecom masts and towers needed to improve coverage and to address capacity issues,” and assured that consultations are ongoing with the appropriate bodies to address the perceived fear of radiation hazards and to create the environment for operators to build and deploy more base stations to address the existing quality of service challenges.


Certainly the concerns expressed in local communities about the construction of new towers are inconsistent with those communities’ stated desire for communication services.


But some operators strongly disagree with the NCA’s assertion that 3G would help to solve network problems on 2G. One operator said “We don’t see how 3G licences and networks would produce any improvement for the mass of customers using 2G networks with quality of service problems. There will be no mass migration of customers from 2G to 3G because the handsets and devices are too expensive and the 3G coverage is not as good as 2G (GSM).” On the average, 3.5G handset cost 300 Ghana cedis.


One of the 3.5G service providers, however, stated that “we have 3G handsets that are comparably priced with non-3G handsets on the market and a range of low cost handsets to suit every budget”.


The other thing the 3.5G service providers are not telling subscribers is that with 3.5G one needs to be closer to a UMTS station than do 2G users need to be to a GSM station to receive quality service. What this means is that the operators must install even more UMTS stations than 2G within a particular area to run 3.5G services efficiently.


MTN says their 3.5G is active in Accra and Kumasi and Zain says they are active in Accra and yet they have refused to answer questions on how many UMTS stations they have installed. One hopes that the Right to Information Bill would be passed sooner than later.


That is a problem particularly because even on the GSM network, which is relatively in abundance, there are huge call quality challenges. But there are more.

Statistics Reporting


According to the NCA, network operators are required to report on monthly basis the number of active subscriptions for both voice and data services. The NCA defined active subscriptions as those which are making and receiving calls and text messages or accessing the internet as at the time of reporting.


Based on those criteria, NCA says the five service providers which are currently operational commanded a total of 11,962,224 subscribers as at January 2009.


The market leader, MTN has 6,592,243 subscribers; Tigo has 2,785,714 subscribers; Onetouch (Vodafone) has 1,733,711, followed by Zain with 463,824 and Kasapa with 386,732.


The NCA says it conducts occasional network audit to verify the authenticity of the figures reported to it by the operators.


According to the NCA, audits are done particularly when there are “unacceptable levels of congestion on a network or deterioration in the call quality”. In such instance the NCA takes raw data from the operator in question. A billing verification exercise is also conducted when the operators advertise new tariffs, obviously because of the financial ramifications for the NCA.


But in separate responses to questionnaires this Writer administered, the operators indicated that they were not aware of any network audit that the NCA has been conducting and that as far as they were concerned the NCA had always recorded and worked with the subscriber numbers as quoted by the individual operators.


Secondly, the operators said in practice there is no uniform procedure for collating subscriber numbers so each operator uses a different software system and they end up reporting parallel subscriptions, where one subscriber, who may have left one network to join another network ends up being captured by both networks as their subscriber. This tends to inflate the figures significantly for both networks.


This is important because it means the figures quoted to justify why an operator qualifies to acquire an additional network code may not be real.

 Thirdly, even though the NCA says operators are supposed to file monthly reports, in practice they file reports on quarterly basis as per the NCA’s own 90-day activity criteria.


To quote one operator, “NCA asks us at the end of each quarter (not monthly) how many customers we have according to the 90-day activity criteria – that means the customer should have used his phone for something in the previous 90 days. As far as I know, they just accept the numbers we give them. We don’t recall any subscriber number audit at our place, and since each network has different software systems, I don’t know how NCA could audit that.”


Meanwhile, investigations by this writer indicate that some of the operators capture simcards sold to distributors as active subscriptions. At least one of the new entrants is on record as having been caught in that practice in neighbouring Benin.


There are also indications that some operators are hitting their rivals below the belt by buying simcards of their competitors in huge quantities to destroy in an attempt to keep their rivals out of the competition. But strangely all those destroyed simcards are captured as active subscriptions and the NCA takes those figures on the face value.


It seems the NCA is carried away by the financial ramifications of having a fast growing mobile phone community in the country as the “inflated” figures show so they do not pay closer attention to whether the operators report the right figures or not.

Second Network Codes


One of the operators intimated that NCA made a proposal to network operators to acquire second network codes (05X range) at a standard cost of one million dollars each. NCA says the standard cost covers allocation, management and use of the code. This means MTN paid at least a million dollars for their newly launched 054 to enable them to attract more subscribers unto their congested GSM network. MTN says its 024 range of numbers is exhausted, but given the possible significant inflation in subscriber numbers, one would have expected the NCA to investigate that claim further before selling the additional code to MTN.


The question also arises - if NCA does network audit to check congestion and deteriorating call quality, how did MTN justify a request for a second network code with the myriad of call quality problems? Where does subscribers’ interest come in as per Section 5(c) of NCA Act, Act 769, 2008; which states that “The Authority (NCA) shall in performance of its functions have regard to the protection of the interests of consumers or users of communications networks or communications services and in particular to the interests of consumers’ choice, quality of service and value for money”?

Street Hawking


Thanks to the NCA, subscribers keep having raw deals from some operators and added to that, they are also contributing to the overwhelming problem of street hawking in their bid to reach subscribers and potential customers in the middle of the high streets.


Lately one finds more young people dressed in MTN, TIGO and Onetouch sleeveless jackets selling recharge cards and simcards in the middle of high streets competing with motorists. Beside the fact that they are a nuisance, they are also living dangerously selling on the streets.


Mr Armah Ashittey, the new Greater Accra Regional Minister has declared war on street hawking and this puts the mobile network operators and their trading partners in the line of fire.


Mr Kwasi Amoafo-Yeboah, Chief Executive Officer of Itel Ghana Limited, agents for MTN, said even though street hawking was a nuisance, it served as a major source of employment for the youth. He, therefore, challenged the Government to find alternative sources of employment for the youth before thinking about clearing them off the streets “else they will resort to all kinds of anti-social activities like armed robbery, pick pocketing and other things”.


But it is common knowledge in this country that designated hawkers’ markets constructed with taxpayers’ money have been abandoned and turned into refuse dump sites and dungeons of lunatics and anti-social characters.


Moreover the practice in other jurisdictions is that, vendors of recharge and simcards operate from street corner stores and sheds and not in the middle of high streets. The regulator must show strength as per Section 5(d) of the NCA Act, which enjoins the NCA to have regard for the impact of the activities of operators on the environment.

Consumers Association


One would have thought that the Consumers Association of Ghana (CAG), would be up in arms at least pushing the NCA to ensure that the operators lived up to the quality of service indicators as required by Article 3(l) of the NCA Act, Act 769, 2008, but Dr Ferdinand Tay, President of the CAG, told this Writer that the Association did not concern itself with issues of network quality. According to Dr Tay, the Association only dealt with issues concerning tariffs in the telecom industry.


Asked why network quality was not on CAG’s menu? Dr Tay conveniently passed the buck, saying; “since you are a journalist, you can talk about it freely but if we did, we stand the risk of being accused by some operators that we are being sponsored by other operators to do a dirty job”. From this standpoint does this Writer need anybody again to tell him that he is taking a great risk with this article? In any case, GNA is a statutory organisation and this falls squarely within its mandate.

Mobile Number Portability


Obviously there is no one to fight for consumers, not CAG or even the legally mandated NCA. But there is a way out; the NCA can at least empower the subscribers to fend for themselves. Mobile number portability (MNP) could be a first step to empowering subscribers to take up the responsibility of getting off congested and problematic networks and yet keeping their numbers including the network code.

 

The MNP system allows a number to be “ported” from the original network that had the number, to a new network of the customer’s choice. This way the subscriber gets to keep contact with family, friends and business associates through the same number even though on a different network.


But the NCA told this writer that it wanted to approach the implementation of MNP with circumspection because it was “cumbersome and costly” and that the experience of other jurisdictions indicated that the benefits of MNP were not commensurate with NECO 10 Economics Telecom Quality


The NCA must be told that a “stronger regulator” is the one who seeks the interest of subscribers. Indeed, outside of the interest of subscribers the business of regulation is an exercise in futility, because why should there be a regulator if there is no need to ensure quality standards, value for money, choice and affordability for subscribers.


It is, however, refreshing to know that the new Minister of Communication is ready to get MNP off the ground. This coupled with Government’s closer monitoring of the NCA and operators; it is the hope that subscribers would have better quality services.


GNA



 

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