Posted: Tuesday 25th March 2014 at 14:31 pm

Chamber of Telecommunications Call For Better Investment Climate

The Ghana Chamber of Telecommunications has called for a more conducive investment environment and policies that will make it easier for telecom companies to commit more capital and resources to their operations in the country.

“Ghana is competing with other markets for investment resources. Therefore, policy decisions have to be viewed in the regional and global context of a race for the same investment resources,” the Chief Executive Officer of the chamber, Mr Kweku Sakyi-Addo, said.

He made the call when he paid a courtesy call on the Managing Director of the Graphic Communications Group Limited, Mr Kenneth Ashigbey, on March 19.

Mr Sakyi-Addo said the telecom companies were prepared to make huge investments in the country on a regular basis, but noted that “these investments must be able to return the profits that will enable the shareholders of the companies willing to plough back to expand”.

According to him, the more the policies of the government become unattractive, the more the investors in the industry are likely to look elsewhere to invest and make the right returns on their investments.

Data usage

In August last year, smartphones were said to have outstripped that of feature phones for the first time in the world, a trend that is being experienced in Ghana as well.

He said the use of data was not outstripping voice because there was an increase in the usage of smartphones in the country and across the world.

“Against this background, we need to invest more to ensure that the infrastructure is ready to meet the demand and not wait to do the opposite because it will bring its attendant challenges,” he said.

Presently, companies such as Nokia and Huawei are producing smartphones at cheaper prices as low as US$80 and US$50 respectively.

With this, it is expected that many more people will abandon their feature phones and opt for the cheaper smartphones.

By using smartphones, there is the tendency for the users to use the Internet for various reasons, including the downloading of music, videos, among other things.

The implication is that they will require more data to be able to download and for them to do so effectively, the telcos should be positioned to provide the infrastructure to avoid congestion and its attendant challenges on the network.

The call by the chamber, therefore, seems to be in the right direction, considering the fact that every 10 per cent growth in the telecoms sector contributes a little over one per cent rise in Gross Domestic Product (GDP).

Meanwhile, he urged players in the industry to position themselves for the challenges and not wait to be overtaken by events.

He said the telcos can also capitalise on innovation within the industry to also innovate to make their products and services more attractive and cheaper for the masses.

Mr Sakyi-Addo said these data could also be transformational in the sense that individuals could use it for e-banking, e-agriculture, e-health, e-commerce, among many others.

Taxes on handsets, others

Presently, there is a 20 per cent import duty on handsets and telecom equipment, making it too expensive for the ordinary consumer to afford.

According to Mr Sakyi-Addo, “if devises are affordable, then more people will purchase them and use them.”

He further argued that such a move would boost the “Communications Service Tax (CST), a tax on usage which cannot be evaded unlike the import duty which can be evaded through smuggling and bribery at the various points of entry and, thus, deny the state the projected and much-needed revenue.”

Cost of mobile services

Energy costs of telecom companies in the country are estimated to exceed 40 per cent of their total expenditure.

Inflation in the communication sub-group has been at almost zero for 36 months, even when the average year on year (YoY) inflation was a single digit, until the end of the third quarter of last year.

In spite of these costs, telecom services in Ghana are considered among the cheapest on the continent, but Mr Sakyi-Addo said the rates could even be cheaper if the costs were reduced and the heavy taxes lowered.

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