In the excitement about Ghana’s Oil find one sector which is seeing impressive expansion and big money deals is not getting as much attention as it should from Investors and commentators alike. I get regular emails from people enquiring about opportunities in the Oil & Gas sector in Ghana, The Oil & Gas is sector is becoming saturated whilst the Telecoms sector still offers ample opportunities for investors.
Ghana’s telecom sector has enjoyed a financial boost in the last couple of years, deals across both fixed and mobile platforms have brought some of the biggest operators in the world to the West African state.
The controversial sale of Ghana Telecom to Vodafone for a reported $900 million dollars and MTN’s sale of 51% of its tower assets to American Towers for over $300 million are some of the well known deals that have been reported.However there is a lot more happening on the ground with the Government recently granting two wimax licenses to operators in the country with a further 3 up for grabs.
The government has confirmed that Glo Telecom will be the sixth and last company to be granted a mobile license to operate in the country. They are expected to launch in the first quarter of 2011.
A sure sign of maturity in Ghana’s telecom sector is the decision to hive off tower management and ownership to third parties as a means of diversifying revenue.It all kicked off in January 2010 when Millicom Ghana(Tigo Ghana) agreed to sell 750 base towers to Helios Towers Africa, the deal was the first major sales/leaseback to be completed by major African telecom operator and an independent tower company on the continent.
The George Soros backed Helios Towers already has a well etablished operation in Nigeria and is looking to move futher into the Ghanaian market. Vodafone Ghana also signed a ten year deal with Eaton Towers to takeover the operations and co-location management of its existing tower infrastructure. The deal is reported to be worth $45 million to Eaton Towers, MTN rounded off the deals for 2010 with their joint venture with American Towers raising $428million for the Mobile operator, Airtel is now also actively looking for a deal involving either a tower sharing agreement or joint venture similar to MTN’s.`
The National Communications Authority which regulates telecom sector has recently called for applications for licenses to build infrastructure, mostly communication towers. Its clear that the three tower management companies mentioned in the previous paragraphs will be at the front of the queue when it comes to these licenses.
In order to prevent chaotic building of towers all over the country and to placate the citizenry who are nerovus about the radiation effects of these towers, only licensed companies will be allowed to build new towers, the hope is that the mobile networks will buy space from the newly licensed operators rather than build their own towers. Companies will have to pay an initial $25,000 fee in order to apply for the license and a final fee of $200,000 if their application is succesful.
The next battle for mobile operators in Ghana will be to discover other means of improving their revenues, no one knows this better than Airtel,whos’ African operations are not making any money as yet, Airtel is acitvely looking to expand its role in the Tower business and expects to be given a license in Ghana to build several more towers which it hopes to rent to out to other operators.
Whilst the opportunities to make money in the mobile sector in Ghana remain buoyant, the network operators are increasingly looking at other sources of revenue as they’re forced to cut call prices in order to stay competitve.
It is against this background that Mobile World Magazine is organising the “Ghana Telecom Summit” in April 2011,it will be the first gathering where both operators and regulators will join officials from the Ministry of Communications to plot the future of the telecoms industry in Ghana.
Issues such as Mobile Number Portability, International Gateway taxes and improving rural connectivity will all be discussed at the summit. The summit which is being chaired by Dr Ekwow Spio-Garbrah the outgoing chairman of the C.T.O and former Minister of Communications for Ghana will also explore growth strategies for the ICT market in Ghana and what role investors can play in driving this growth.
This has been a great year for the telecom sector in Africa and Ghana espeacially, 2011 will be the year that investors look to actually start making money on their investments. Mobile Applications, mobile broadband and continued expansion in telecoms infrastructure will be some the areas to watch over the next 12 months.
The NCA is also expected to confirm the five companies expected to be granted WIMAX licenses. With the NCA now run by a former Investment banker it is hoped that relationships between operators and the regulator will improve and issues such as the Governments decision to tax all incoming international calls and the mobile number portability issue will be resolved to the satisfaction of all parties.