Telecoms companies operating in Ghana fear they could be forced to cave in from the pressure of the harsh business climate prevailing in the country.

SERAME TAUKOBONG - MTN GHANA CEO
SERAME TAUKOBONG – MTN GHANA CEO

The harsh economic conditions, depreciation of the local cedi currency and the prevailing energy crisis are some of the most critical factors affecting business for the telecoms companies.
“With these conditions coming against the fact that we have not seen any tariff increases for a long time now, if these continue, the ability to continue to do long- term investment becomes challenged,” Serame Taukobong, Chief Executive Officer (CEO) of MTN, said here on Tuesday.
Industry analysts say only one Telecom company out of the six in the West African country at the moment is making profit.
Due to the energy crisis, and to ensure energy reliability, the MTN’s expenditure on diesel for powering generators alone for instance went up by about 100 percent with budget for energy alone accounting for up to between 25 percent and 30 percent of total operational cost, said Taukobong.
In addition to this, the CEO noted that battery theft at their cell sites, fiber cuts by constructional firms, as well as SIMBOX fraud had been working against telecoms companies in the country.
MTN is the largest telecommunications company in Ghana with about 14 million subscriber base and a national mobile connectivity pegged around 26 million.
There are fears that should the difficulties in the economy persist, things could take a turn for the worse in the telecoms industry with possible job losses as a result of higher costs of operation.
“Should this continue for some time, we will need to raise tariffs at a point and also reduce investments into service quality and perhaps lay off some staff,” the MTN boss warned.
He added: “Sustainability would suffer under the current conditions; if you cannot make the right returns to cover cost, then you cannot continue to invest into the sector so long-term sustainability would be affected.”
The CEO of the Telecoms Chamber, Kwaku Sakyi-Addo, urged government to take the right policy and regulatory decisions to ensure the sustainability and growth of the telecoms sector.
He told Xinhua in an interview that this was important because of the impact of the telecoms industry on the growth of business and the entire economy.
“Ghana’s telecoms market is competing with other telecoms markets when it comes to investment attraction and so policy and regulation which don’t attract capital would have implications for growth and job creation,” he stressed.
Sakyi-Addo observed that targeting telecoms companies for higher tariffs as compared to other industries for instance would mean eating the egg that should be hatched.
The energy crisis in Ghana has started taking a heavy toll on labor as industries have started laying off workers in the midst of higher costs of production. Enditem

Business24

Source: Xinhua

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