Thursday, November 02, 2006

Westel to Operate Mobile Service?


Western Telesystems (WESTEL) Ghana Limited has been granted a licence by the National Communications Authority (NCA) to operate a mobile service.


This brings to five, the number of mobile telephony service providers in the country and the second state-owned company after Ghana Telecommunications Company (GhanaTelecom) to obtain a mobile service licence.


The acting Director-General of the NCA, Major John Tandoh (retd), on Tuesday, handed over the licence, which formally empowered the company to operate, to the acting Managing Director of WESTEL, Ms Ursula Owusu, at a brief signing ceremony in Accra.


WESTEL, which is already plagued with problems of meeting its targets, as far as, fixed line service is concerned, comes at a time the mobile sector has become more competitive.

Presently, Scancom Ghana Limited, operators of Areeba, holds the lion share of the market with up to 52.4 per cent of the total number of subscribers of 3,798,096 as of the first quarter of the year.


It is followed by Millicom Ghana Limited's tiGO GSM mobile service with 770,154 subscribers, GhanaTelecom's Onetouch with 711,119 and Kasapa Telecom, operators of Kasapa mobile service with 136,823 subscribers.


The company, which is in competition with GhanaTelecom fixed line service, lags behind in the competition, with only a little over 2,816 subscribers, constituting about one per cent of the total market share of 348,397 subscribers nationwide.


But Ms Owusu, after receiving the licence, indicated that WESTEL was not deterred by the competition in the market because, "we have studied all that we need to launch ourselves into the market and capture a substantial part of the market share with all the innovative products we have under our sleeves".

WESTEL obtained a licence to operate as the country's second fixed line service operator about seven years ago and has since not been able to meet its targets of rolling out up to 100,000 fixed lines to its subscribers over a period throughout the country.


In September 2005, 66.7 per cent stake in the company was sold to the Ghana National Petroleum Corporation (GNPC), which was then the minority shareholder in the business, by ACG Telesystems (Ghana) Limited, the then majority shareholder, following a multiparty discussion between the government of Ghana and all the stakeholders of the company. This makes GNPC, which is also owned by the state, the sole shareholder of WESTEL.


To recapitalise the ailing company as part of its privatisation process, GNPC subsequently invited bids from companies for the appointment of a Transaction Advisor to assist it select what has become a common palance as a "strategic investor" for the company.


According to Ms Owusu, the privatisation process was on-going and it was expected that the process would be completed by the end of the first quarter of 2007, after which the company would fully commence business to as she put it, "give the four a run for their money".


"The road to this day has not been easy and smooth and that alone challenges us to give Ghanaians what they deserve", she said optimistically.


Ms Owusu admitted that the company had faced a lot of challenges since the first day it was granted a licence to operate the fixed line service and noted that the new WESTEL was more than rejuvenated to roll-out more fixed line service, mobile service, as well as, high speed data services.


Asked about the source of funding for the company to undertake its ambitious roll-out programme, Ms Owusu said "we know what we are about but I will not tell you where the money is coming from".


She said the company was aware of the penalties should it fail, and stressed that competing with others, would had been motivate to deliver.


On the company's public payphones which were almost out of the system, she said it was a strategic decision by the management of the company to phase that service out because it was not profitable.


She said the company in its new focus was looking more into the future and was ready to put money where it would have return on investments.


Mr Tandoh congratulated the company for its fight to get the licence to operate as the fifth mobile phone service provider in the country.


He pledged the commitment of the NCA to ensure that WESTEL survived the competition




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