NCA Must Revisit SMP Policy to Revive Competition and Protect Consumers
When the NCA declared MTN Ghana as a Significant Market Power (SMP) in June 2020, the move raised expectations. The idea was simple: put in place targeted measures so the dominant operator’s strength would not obstruct competition, innovation or consumer choice. But now, five years on, some of those interventions are producing worrying signals rather than the intended correction of market imbalance.
The NCA’s 9th June, 2020, press release confirms that MTN was formally declared SMP under Section 20(10) of the Electronic Communications Act (Act 775). At the time, MTN controlled 57.07 % of the voice market and 67.78 % of the data market. The NCA justified the declaration on the basis that such dominance “exposes the country to the dictates of the dominant operator, militates against effective competition and impacts negatively upon investment in the sector.” On 10th June, 2020, I published an op-ed on titled: Why the NCA should thread cautiously on MTN’s significant market power case.
In response, the regulator implemented a series of corrective measures intended to give rival operators some breathing space, improve competitive conditions, and protect consumer welfare. These measures included requiring MTN to observe on-net/off-net parity so that voice and SMS from MTN to other networks are priced no better than MTN to MTN, ensuring that being on MTN does not give an unfair advantage and imposing asymmetrical interconnect rates, meaning competing networks pay lower termination/traffic fees to MTN, intended to improve the economics of smaller networks.
Additionally, the regulator required MTN to seek regulatory review and approval for tariffs for certain services, limiting its ability to under-price rivals and squeeze them out and setting of floor and ceiling prices for certain services as well as mandating that MTN submit plans for national roaming and allow other operators access to its network in underserved areas, to improve infrastructure sharing. These are sound in principle. The dominant provider is not being punished for being successful. Rather the measures are meant to keep the market open, allow smaller operators a chance, and ensure consumers have options, not one winner takes all.
So why the concern now?
First, the market share statistics suggest that MTN remains overwhelmingly dominant. Recent reportage suggests MTN may control more than 75 % of active subscribers and about 90 % of mobile network operator (MNO) industry revenue.
Second, smaller operators are not appearing to gain meaningful ground. The intent was to stimulate their growth, but has rather made them worse off. The very operators the SMP measures were meant to help appear worse off. Other industry players keep losing customers, while MTN, the SMP, has rather gained significantly on all fronts due to its network effect advantage. Recently, AT had its cell sites shut down by a service operator over accumulated debt. It is no longer an exaggeration to say that AT finds itself “intensive care unit” state due to weak growth, debt and competitive headwinds.
Third, consumers are not visibly benefiting. Data prices have increased despite the SMP designation, even while complaints about service quality remain. In all honesty, the SMP measures have not yet delivered the intended service quality improvement, price relief or stronger competitive dynamics.
Acknowledging MTN’s role
It is important to emphasize that MTN has done nothing wrong in the sense of illegality or impropriety. On the contrary, MTN invested heavily in infrastructure, took risks, expanded coverage, and built scale. It deserves credit for that. At this time, we must also politely ask why the then Vodafone and Airtel Tigo became reluctant to invest in their network. The government of Ghana cannot escape blame for the problem we find ourselves today. The government owned 30% in Vodafone/Telecel and 100% in AT shares. MTN in the midst of all the challenges, defied the gravity and has been consistently investing in its network. It is no longer surprising that it posted a profit of GHC 5.5 billion and its data revenue surged by 47%.
The question is not about punishing the “big brother” for success. It is about ensuring the market does not evolve into a winner-takes-all scenario where the dominant position becomes so entrenched that consumer choice, innovation and competitive pressure shrink.
The risk of a single dominant player
A telecom market dominated by one operator is frankly risky for a digital economy. If MTN were to suffer a significant cyberattack, a large network outage or systemic failure, the impact would be nationwide. Voice, data, and mobile money services could be disrupted. It could affect workflow nationwide. Such dependency introduces systemic fragility. A competitive ecosystem with multiple viable players is safer for consumers and the economy alike.
The call for evaluation and review of SMP Measure
Given the data and trends, it is time for the NCA, in consultation with government and stakeholders, to review the SMP portfolio and ask: are the existing remedies working? If not, why not? What adjustments can create a truly level playing field? Maybe it may the right time to recalibrate asymmetrical interconnect by ensuring the benefits given to smaller players are conditional on demonstrable reinvestment, network roll-out and service quality improvement.
More importantly, the government must provide tax, spectrum or infrastructure incentives to the non-SMPs and newer entrants or expanding operators, recognizing they face scale disadvantage. Government must be willing to sacrifice some upfront revenue on spectrum allocation and other taxes to enable the non-SMPs to grow before they can be “weaned off” any state support.
Why competition matters for consumers
Strong competition delivers benefits: lower prices, better service quality, faster innovation and more choice. With only one major player, the incentive to improve may weaken. The dynamic pressure of rivals leads to investment in networks, novel pricing models and customer-centric service.
A balance between incentive and regulation
There is a delicate balancing act. On the one hand we need to maintain MTN’s incentive to invest and any punitive regulation would deter the very investment we want in Ghana’s digital future. On the other hand we cannot ignore that the market structure is skewed and may entrench a digital oligopoly. After all, competition should not be blind to equity and fairness.
In conclusion, SMP declaration has rather made MTN bigger, diminished competition and rendered the telecom market not attractive to investors. We need a critical review of the telecom market landscape aimed at creating a more competitive, efficient, and equitable sector.
