The National Communications Authority (NCA) will never admit this, but they know that they have created a huge mess in Ghana’s telecoms industry, and their motivation-in-chief is MONEY and not prudent and progressive regulation. Just read the following articles from me and you will know this is true:
Elephant in the room: Telecom industry collapsing under this NCA? – Part 1
Elephant in the room: Telecom industry collapsing under this NCA? – Part 2
Elephant in the room: Why SMP measures will never work on MTN
ATC Ghana’s de facto SMP status and implications for smaller operators
Correcting the telecom market imbalance – the co-location tower cost factor
Co-location tower cost suffocating smaller operators
Now what we have left in the telecoms industry is a monster so recklessly and irresponsibly created by NCA through a greedy pursuit of money rather than forward-looking regulations for a long-term and widespread benefit.
But the NCA is not stopping there. It first destroyed all the local players it took US$6 million licensing fees each from and promised to protect. Then it supervised the bailing out of big players from the market. Now there is nothing to take advantage of and make easy money from, so, it is now going after vendors who provide managed services to operators.
If you have not read our exclusive story on the subject that triggered this article, then take note that the NCA has quietly amended the Electronic Communications Managed Services License (ECMSL) to limit the scope of support Huawei and Ericsson can provide to the mobile network operators (MNOs).
Consequently, the NCA has either licensed or is licensing new vendors to take up a greater part of the job from these two long-time partners of the telcos. All this is being done without consultation with the affected vendors nor even the telcos who are now going to be compelled to allow the newly licensed vendor(s) to manage a large part of their networks on day to day basis.
Per the amendment, the Huawei and Ericsson, which installed and have been managing almost all of the network equipment of all the telcos and other operators in the country for years, have been classified as Original Equipment Manufacturers (OEMs), which is now a Category Two License, costing GHS500,000, plus a GHS45,000 application fee and 1% each of their annual revenue as regulatory fees to NCA and GIFEC (Ghana Investment Fund for Electronic Communications).
The license limits Huawei and Ericsson to importation of equipment on behalf of the telcos and other industry players, installation of same, and the provision of what is described as Level 3 support services – maintenance and upgrade of Hardware and Software release.
Meanwhile, the new vendors christened Non-Original Equipment Manufacturers (Non-OEMs), are now going to be Category One license holders, and offer Levels 1 and 2 support, i.e. – run Network Operation Center (NOC), Call Center Fibre managed services, Field Level maintenance (radio and transmission), Tower sites and other released services.
The Category One license is going for GHS1 million, plus GHS55,000 application fee plus the usual 1% regulatory fees each to NCA and GIFEC.
To put it in layman’s language – it is like you go to Toyota Ghana and get a brand new Toyota Landcruiser. You then make Toyota your first point of call for routine maintenance, which is the smart thing to do. But then, out of the blue, an industry regulator jumps in and says, from henceforth, you can no longer go to Toyota for routine maintenance unless the car completely breaks down or you need some spare parts imported. The regulator then decides for you which mechanic should be doing your routine maintenance. Very interesting indeed.
This writer gathered that the first in line to be licensed as a Category One vendor is a company owned by a Nigerian who is most likely a crony of people at NCA and or in government. It would appear that in the typical fashion, the NCA is facilitating a situation where people in government are seeking to personally own portions of every industry where they think there is money, so that when they leave office, they will have a comfortable retirement package at the expense of everyone else.
Past leaders of the NCA and their cohorts in government did similar things; they mooted all kinds of licenses and policies that created businesses, which later became cash cows for them after they had left office. We all know the former NCA Director-General, a Director of Regulatory Administration, other directors, as well as even directors of Ministry of Communications who became staff and consultants to entities created by licenses they intentionally pushed through while in office. It is not a secret. It is obvious they do these things not in the interest of the state but for some selfish gain.
But here is what we know about the current move to shortchange Huawei and Ericsson to the benefit of other vendors owned by people who are most likely cronies of people in public office:
The two affected vendors (Huawei and Ericsson) as well as the telcos have raised some critical concerns about the NCA’s move.
No consultation
For starters, concerns have been raised about the manner in which the NCA sprung a surprise on the industry players without consultation. It is only fair and prudent to ensure that since the decision is going to affect the investments of the players, and possibly the network performance, there should have been some consultation, even if just for the records. But for a regulator whose preoccupation is the next avenue for money rather than prudent regulation, that common sense move is not a factor.
The NCA Board appears to have elected to be legalistic to the core, rather than putting a human face to it and being collaborative on this matter. Section 25(3) of the National Communications Authority Act, Act 769, only enjoins the NCA Board to notify affected persons/entities of its decisions and provide reasons. It does mandate them to consult before the decision. So, as far as NCA is concerned, so long as they are within their legal remit to do things this way, to hell with the consequences.
Impact on Quality of Service
But there are concerns about the implication for consumers regarding its impact on quality of service. The NCA is rushing the industry players to apply for the new licenses within fourteen days of informing them. Meanwhile, the point has been made that such a transition, per international best practices, will require over a year in some cases, to be done in a way not to shortchange consumers in the short-term and even degrade the telcos’ networks in the long term.
The point has also been made that the industry players have evolved into multi-technology operators. As a result, the two main vendors, Ericsson and Huawei have also invested heavily to position themselves to meet the aspirations of these operators. So, such a huge limitation of their scope of work makes nonsense of their investment. Moreover, such a transition will most likely have an adverse impact on the revenues of the telcos themselves.
Judgement debt
Indeed, there have been hints of possible judgment debt lawsuits if the license is imposed in the form it is now.
An industry expert told Techfocus24 that any of the two vendors will be justified in seeking compensation because they invested based on the original licenses they were given. So, if the new license will render their investment a waste, they should be entitled to some compensation. This is simple logic.
False expectations
Meanwhile, the expert also thinks the NCA and people in government seem to think that there is some huge money to be made in the provision of day to day maintenance of telecoms equipment and other managed services, but the truth is that it involves a lot of work and resources to execute, particularly the field work, which can be a heavy drain on vendors’ earnings. He is therefore concerned for whoever the new vendors will be and what expectations they have.
“Given how, in the past, the NCA’s assurances of protection made some local companies buy Broadband Wireless Access (BWA) licenses for US$6 million each, only for the NCA to allow the industry monster to wipe them out, any investor, based on this new license, should be measured in their expectations,” he said.
The point here is that, taking the NCA’s word for it can be costly for any investor. Even this new license categorisation and how it affecting Huawei and Ericsson is a clear example of how the NCA can lead licensed companies to invest heavily, only to turn round and amend licenses to satisfy the political class of the day, and harm the licensees with careless abandon.
No Local Content Clause
Again, one would have thought, that after recklessly destroying the local content in the telecom space, NCA was even going to use this license as a conduit to reinject some local content, but no. There is absolutely nothing in the licensing conditions that says only local entities or companies with majority local ownership are qualified to apply. It’s open to all, including multinationals. It makes one wonder what the NCA’s true intentions are.
As stated above, we gathered that the first company being licensed under Category One, belongs to a Nigerian businessman suspected to be a crony of some people in authority. If that is true, then one can only conclude that the intentions for this new license categorization are nothing short of ignoble.
Weird Novelty
Meanwhile, other industry experts think this categorisation, which spuriously excludes existing OEMs from day to day maintenance of equipment and other critical services they installed is a “weird novelty” that does not happen anyway in the world.
The fear is that this kind of categorisation will most likely create room for players in the managed service space to sabotage each other, and in the end the telcos and their customers will suffer for it.
Website Information
It is interesting but not surprising to note that on the website of the NCA, when you click on Licensing and Authorization and select Other Services (at the bottom of the page), you will find Communications Managed and Support Services License. But what is published there is NOT the amended ECMSL. It looks like NCA is yet to update the information on its own website to reflect the new licensing categories for managed and support services, if ever they will even put it there.
My Convictions
You just need to look around and see that there seem to be a concerted effort by those holding political power to sell any and everything to themselves through their cronies; and they will use any willing public institution to exact that agenda and boldly claim they did not do anything outside of what the law permits.
Let me rest here.
