The decision by communication sector operators to absorb the increasing cost of inputs has held down inflationary pressures in the communication sub-sector of the economy, B&FT analysis has shown.
This has ensured that the prices consumers pay for the consumption of communication services remain unchanged.
Since the beginning of the year, price changes in the communications sector have remained stable at a time the declining value of the cedi has pushed up prices in all other sectors of the economy.
According to the Ghana Statistical Service (GSS), as at the end of August this year the communications sector recorded a year-on-year inflation of 0.2 percent, which is far below the economy average of 9.5 percent.
Analysts have attributed the stable price in the communications sector to the competition in the telecom industry, which has forced operators to engage in price-wars in an effort to attract more customers to their networks.
As per the Consumer Price Index figures released by the GSS, the contribution of the communication sector to inflation in August was zero percent.
Derek Barnabas Laryea, the Research and Communications Manager of Ghana Chamber of Communication — umbrella body of mobile telephony operators in the country — told B&FT that the country?s inflation performance hinges partly on price developments in the sector.
?Its important to note? the achievements of the communications sector, as this stability literally boils down to operators absorbing high and fluctuating costs coming from inputs of other sectors (e.g. transport, power, water) while having to operate without increasing their cost of service.
?Really, there is need for a policy that protects this industry which has become an essential enabler to every aspect of life today and a vital tool for economic growth,? he said.
However, other analysts — while recognising the contribution of the communication sector to the economy — have played down attempts to project the sector as the determinant of the country?s inflationary performance, since its contribution to the consumption basket used in calculating inflation is almost negligible. ?
This, they explained, stems from the fact that the weight of the communications sector in the consumption basket is just 0.3.
Inflation in the country stabilised for the month of August after going up continuously for the previous five months to peg at 9.5 pecent, which is higher than the 8.4 percent recorded for the same period last year.
The GSS has attributed the August inflation performance to the relative stability of the local currency as well as the low food rate, which limited the overall rate of consumer price increases.
The inflation figures for August is still within the? targetted band of single-digit inflation this year, but far from the low 8.3 percent recorded in the same period last year or the high of 20.50 percent seen in July 2009.
By Evans Boah-Mensah
