MTN wants fair price for remaining 4G spectrum slots

Business News of Thursday, 16 May 2019

Source: Myjoyonline.com

2019-05-16

Mtn 4gFile photo

MTN Ghana has said it is interested in acquiring the remaining 4G spectrum to improve customer experience, but telecoms giant said it will only acquire it if the price is fair.

It would be recalled that in 2015, the National Communications Authority (NCA) auctioned the 2x10MHz slot in the 800MHz spectrum band at a minimum price of $67.5 million and MTN bought one.

But Vodafone bought one of the three 2x5MHz slots in the same band at a negotiated prices of $30 million when they were auctioned last year at an asking price of $33.75 million.

This means Vodafone paid $3.75 million less than what MTN paid for the same lot of spectrum.

When NCA did the auction last year, it excluded MTN but stated that if any of the spectrum lots remain unsold, it will offer holders of 800MHz bands like MTN an opportunity to buy the spectrum.

MTN Ghana CEO, Selorm Adadevoh, told shareholders at the maiden Annual General Meeting of MTN Ghana that the company has officially expressed interest in acquiring the spectrum slots, but NCA is yet to make the offer formally.

He later told journalists that MTN Ghana expects the NCA to offer the spectrum slots at a fair price, given how much Vodafone bought it for.

“We all know how much MTN bought ours for [$33.75 million for 2x5MHz slot] and we know how much Vodafone bought theirs for – so we think it is only fair to expect the NCA to offer the remaining slots at a fair price,” he said.

Meanwhile, MTN has been acquiring more spectrum to improve service quality, the recent one being the 2x15MHz slot in the 2600MHz band from Goldkey Limited last year.

On the back of the combined 800MHz and 2600MHz spectra, MTN recently launched a 4G+ services, promising data speeds of up to 300 megabites per second.

The CEO said in 2018, MTN increased 4G sites to 250 to augment its 600 2G sites and 1,100 3G sites across the country.

Performance

Selorm Adadevoh said the investment in network expansion resulted in quality of service improvements, which combined with aggressive marketing, sales, and product offers to deliver a 12.7 per cent growth in subscriber base to 20.1million.

“In the course of the year, our voice market share grew to 49.1 per cent, data market share reached 59.9 per cent, while Mobile Money customers grew by 17.8 per cent to 13.6 million,” he said.

MTN Ghana also reported a 23.5 per cent in service revenue growth, driven by a 30.2 per cent growth in data revenue, 34.6 per cent growth in digital revenue and a comfortable 60.3 per cent growth in Mobile Money revenue.

During the year, MTN Ghana also won 40 prestigious domestic and international awards, including the newly created platinum award for biggest taxpayer by the Ghana Revenue Authority. Indeed, MTN is on record as having single-handed provided up to 3 per cent government tax revenue every year for many years.

Stabilization Levy

Speaking of taxes, Corporate Service Executive of MTN Ghana, Samuel Koranteng is worried that the 5 per cent National Fiscal Stabilization Levy remain effective even though there was a 2015 sunset clause on it.

The levy was introduced to make profit-making companies pay 5 per cent of their profit after tax to support government stabilize the economy over an 18-month period between mid-2013 and 2015, but it has since been in effect till date.

In the telecoms industry, only MTN pays because it is the only telco on record as making profit.

Sam Koranteng said the levy has outlived its deadline and it has become necessary to free MTN of it, so that they can invest the money into improving the network and getting more value for Ghanaians.

Dividend

Meanwhile, at the AGM, MTN announced a 5 Ghana pesewas per share dividend, which came to a quantum of GHC754 million, representing a record 81.2 per cent of profits after tax.

Some shareholders complained that the 5 Ghana pesewas per share was too small, but the Board Chairman of the company, Dr. Ishmael Yamson explained that there are over 127,000 shareholders and there are several billions of single shares and that was why the dividend per share was low.

He further stated that, compared to other equities on the Ghana Stock Exchange, the 81.2 per cent of profit after tax given out as dividend is a record no equity can beat.

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