Data price increase by MTN not justified
Every telco is within their right to sell their airtime, data and devices at the prices they choose, provided they are sure it makes them competitive and attractive enough.
However, I honestly don’t want think the recent 75% increase in Fixed Data prices by MTN Ghana is justified in anyway, particularly within the context of the reason they gave, which was deliberately crafted to appear as if there were some external forces compelling to increase Fixed Data prices.
In their press release announcing the fixed data price increase, specifically for their Fixed Fiber and TurboNet bundles, they said “this has been necessitated by the need to align with market rates.” But they never said what exactly necessitated the increase and which market rates they are supposed to align with. Very vague and open to all kinds of interpretations. Very deliberate.
So let’s give it some context. It would be recalled that some weeks back, MTN increased their Mobile Voice, SMS and Mobile Data rates in fulfillment of two conditionalities of their significant market power (SMP) status – onnet-offnet parity and and a directive from the NCA for them not to have the cheapest rates in the mobile space. The ultimate goal is to bring some balance into the market.
I have read a post that tried to use the onnet offnet parity conditionality to shoot down the increase in fixed data prices on MTN. That argument was out of place because the parity condition has nothing to do with data, much less fixed data. But there is still a sound argument why MTN was wrong in increasing Fixed Data prices and punishing Fixed Data customers for no justifiable reason.
There is currently none other reason necessitating increases in prices by MTN except their SMP status. But MTN’s SMP conditionalities were in specific reference to MOBILE VOICE, SMS and MOBILE DATA. It has ABSOLUTELY NOTHING to do with fixed services.
Vodafone is fixed dominant player
Indeed, when it comes to fixed services in Ghana, Vodafone holds an overwhelming market share and they will be named SMP if government decides to name one. At the last count, Vodafone Ghana had over 97% fixed services market share. The rest are nowhere near Vodafone at all. I don’t even know why Vodafone has not been named SMP in the fixed market yet.
Read: Transport fares to increase by 40% from January 17
So, MTN has no business increasing fixed data prices at all, with respect to its SMP status. They are nowhere near SMP in that space. And no one, and nothing has necessitated any need for them to align to any other player’s rates in the fixed market space.
From very reliable sources, MTN only increased their fixed data rates as a proactive measure to preempt the National Communications Authority (NCA). Apparently, the NCA, as by law required, keeps going to MTN from time to time, and asking them to implement one SMP condition or the other. So, in order not to wait for NCA to call for an adjustment in fixed data rates, MTN chose to be proactive and adjust fixed data rates before they are asked to. And in doing so, they created the impression that it was part of their SMP conditionalities.
But I think MTN chose the the wrong space for this price adjustment because they are not the SMP in the fixed service market and their conditionalities are in specific reference to mobile voice, mobile data and SMS.
So why is MTN punishing TurboNet and Fixed Fiber customers in the name of being proactive? Why would MTN assume that NCA would ask them to increase prices in a space they are not the dominant player?
This fixed data price increases is not right and MTN needs to be magnanimous enough to pull it back and do the right thing. This is not the right thing to do at all. If they don’t do what is right, then the suspicion that they are just creating a situation for people to wrongfully point fingers at government would be upheld as true.
But there is one score on which I will cut MTN some slack. From day one, they have argued against the wholesale declaration of SMP and insisted on the declaration being limited to specific services. But at this stage it is not clear when and what the regulators will “attack” at MTN.
Maybe one day they will even go after mobile money, who knows. So government also needs to be clear on which part of the MTN business is not subject to SMP conditionalities so they can strategize as such. The uncertainty is not good for planning and definitely not good for the consumers.
But for now, I still don’t think MTN is fair with this their proactive measure that punishes fixed data customers for no apparent reason. It is like a decision out of uncertainty-induced paranoia and customers are having to suffer for it.
Please, MTN do the right thing.
