The dead hand of the Ghanaian Government has prevented a good market from reaching its full potential and becoming a great market. Everyone knows what needs to happen but somehow it never quite seems to get done. Nevertheless competition in the mobile sector is about to hot up. After lengthy delays Ghana Telecom (with its One Touch mobile subsidiary) looks likely to be sold to an international player. Zain looks likely to launch operations in Q3 of this year and a sixth licence will be granted, probably to the modest and retiring Mike Adenuga of Globacom. In this issue we publish what is probably the first interview with Zain’s new CEO, formerly CEO with One Touch, Philip Sowah and we also look at the rise of VAS services in an interview with Rancard Mobility’s Kofie Dadzie.

Back in Ghana after a three year absence, the most striking thing is the growth in Wi-Fi hot-spots both pay-for in public spaces and free in hotels. There are also several confident wireless ISPs including Busy Internet and iBurst. However, the joys of accessible bandwidth were rather undercut by a city-wide power cut: one step forward, one step back.

The Government’s long backlog of past messes (Ghana Telecom, Westel and Voltacom) is shortening but it’s been over five years and counting. Westel has been sold to Celtel who will relaunch as Zain this autumn.

The Government is still in negotiation with Vodafone (who had people in the country for two weeks doing due diligence) and France Telecom. Other operators – Russian and Indian – were mentioned but these hardly fit the criteria that everyone seems to have set: respectable international operators capable of making the required investment. The company is currently ludicrously over-staffed (3,700 people) but the Government appears to have made no effort to pick up the costs of making anyone redundant.

The National Infrastructure Company – which will based on the Voltacom fibre assets along with the in-fill network Huawei is building – will appoint a professional CEO but will inherit the Voltacom staff and stay part of Government. Not exactly the recipe to light the blue touch paper for significant change.

SAT3 prices are down to US$2,250 on the basis of the GISPA deal but Ghana Telecom now seems to be offering these to all takers, prompting GISPA to renegotiate. At a national level, both market leader MTN and Tigo – frustrated at the quality of Ghana Telecom’s offer – are building their own fibre networks. MTN may be no 1 (with over 50% of the market) but customers are unhappy with current levels of network congestion. The NCC’s public ultimatum to the operators (which seemed to follow a similar move by Nigeria’s NCC) seems to have disappeared into the mist. All the mobile operators are selling GPRS and EDGE.

There will soon be six operators in a licence process that it’s hard not to believe will result in Globacom entering the market. But with a total potential of 10-11 million subscribers, there may well be enough for everyone despite the predictable moaning about too many operators.

Kasapa (which will soon be bought by an international company) is offering its network to ISPs to help them sell Internet services, giving them about a third of the revenues. By the end of 2008 or early in 2009 it will introduce EVDO which will ratchet up the expectation level in market. Coverage is currently 7 out of the 10 regions in the country.

In terms of the priorities of the regulator NCA, it will first make a 3G allocation to existing operators before moving on to making Wi-MAX spectrum allocations. It still maintains that VoIP is a technology and if you have a proper licence you can do it. But unlike Kenya’s CCK it has made no move to give ISPs a new licence to include VoIP and this undoubtedly will hold up the arrival of Triple Play.

The NCA says that the Wi-MAX licences will have “Triple Play capabilities”. Unfortunately NCA has to follow the rather slow-moving Government that has ruled out more liberalisation while it offloads Ghana Telecom. It remains to be seen whether the process will pick up speed once that deed has been done.

Zain Ghana’s Sowah will offer customers a “Rolls-Royce” network

Q: So how long were you with One Touch?

Three years and before that I was in the USA as an e-Procurement Manager for Becton Dickinson and prior to that, I was with IBM Global Services.

Q: When will you launch?

It will be this year but I can’t go into details. We will launch as Zain as the rebranding of the other Celtel operations will happen over the summer.

Q: What will be the extent of the network at launch?

We’re expecting to have a substantial proportion of the country covered and we will not have the levels of congestion of our competitors. We’re both building in significant capacity to offer higher service levels and for a higher level of customers.

Q: What’s you market entry strategy?

We can see some of the shortcomings in the market: for example, quality of service and customer service and we think these are areas we can do better at. We will also launch our One Network offer and all other parts of the Zain promise.

Q: What about price?

Compared to other countries Ghana already has quite low prices. There’s no advantage in having a price war and it’s not part of Zain’s strategy.

Q: What’s your target number of subscribers?

In every market, Zain’s goal is to be number one. It’s our intention to be as close to number two in the market as possible in the next couple of years.

Q: What’s the total potential in the market?

Every time we set a target, we exceed it. The current penetration figure we think can be achieved in Ghana is 55% but who knows?

Q: What will the impact be of the sixth licence entrant?

We do not think it is necessary at this time. With Zain coming to market and Ghana Telecom (with its mobile subsidiary One Touch) being sold, there’s enough additional competitive activity.

Q: Who would you like to see buy Ghana Telecom? As a Ghanaian, I’d like to see it run by an well-know international operator. That would make most sense.

Q: Will Zain be introducing GRPS and EDGE?

Yes, at a very minimum. 3G is being considered because we are truly building a “Rolls Royce” of a network to make the user experience truly different.

Q: What about mobile data services?

We’re not tapped in there at all so there’s potential for SMS and SMS-based services and data over GPRS and EDGE. Ghanaians love music.

Q: You bought Westel which is not a mobile operator. What are you going to do with things you bought that don’t relate to the new operation?

Essential Westel is an international gateway and some subscribers. We will give the existing subscribers service but how has not been finalised. Our starting point is that they will get service at a higher level.

Q: Will you build fibre into your infrastructure plans?

We will do the business case for fibre but will start with microwave infrastructure. Of course, we can lease fibre from other operators.

Q: What do you think of the Government’s National Infrastructure Company?

It’s an interesting idea but I don’t have updated information on it. There’s a meeting to bring us up to date (next week). The idea has to be managed very carefully. But a number of operators already have fibre networks and therefore it might never be profitable.

Q: What do you think of the current level of SAT3 prices?

Our understanding is that Ghana Telecom will be giving quotes to operators but I have no sense of the pricing yet. It’s being discussed.

Q: What did you learn from your time at One Touch?

I learnt an enormous amount including a good understanding of the mobile telecoms environment in Ghana. It taught me how to do a lot with very little!

Rancard Mobility’s Dadzie offers a regional VAS platform for operators and content providers

Q: When did you start the company and why?

In April 2001 because we wanted to focus on enterprise and communications apps. But by 2001 we had already built a carrier class WAP gateway but it needed the mobile carriers to introduce GPRS and to extend their coverage to give it a “shot in the arm”, make them interested in it.

Q: So how did you make the transition from enterprise applications to the current business?

Well we’d always had this focus on communications technology so it wasn’t such a big leap. We looked at DoCoMo’s i-Mode model and what worked in the UK and based on that built a fully integrated platform. When mobile VAS providers began to re-emerge, we weren’t actually looking for that business because we were still doing enterprise projects. But we had started building enterprise applications for mobile operators. For example, we built a web interface to allow customers to see their bills for Millicom Ghana. As we built that relationship, it said it wanted an SMS gateway and so we said ‘we can give you that’. Another company, Itel, one of MTN Ghana’s distributors, wanted to produce an online platform to communicate with its vendors.

Q: So you’re now a mobile VAS provider?

Basically we offer a service delivery platform for mobile carriers and content providers. For the latter, we act as a bridge between them and the mobile operator and it could be for e-mail, multimedia, SMS or whatever using any protocol and including DRM. Content providers can be content providers. It will stream content on to any website and the content can be loaded on to our system and be distributed. And our platform for all this work is Rancard Mobility.com

Q: What’s the split between operators and content providers as you customers?

It can vary between 50/50 and 60/40 but it won’t work without both being properly involved. One without the other won’t work. Some operators mandate content providers to work with 2-3 chosen content providers for that carrier. Some content providers use the platform directly.

Q: What sort of content providers are you working with?

I’ll give you two examples. Media Edge is the media content arm of Charterhouse. The latter is an events manager and does things like the Ghana Music Awards, a talent show called Miss Malaika and Stars of the Future. It does SMS voting at these events and also downloads. These events are shown on TV and we manage all the interactive audience response. It generates several hundreds of thousands of messages and sometimes even millions of messages.

Voting is a high-use application. Nestle Central and West Africa promote an event called Nestle African Revelations that is managed by Publicis (an advertising agency). We provided connectivity for providers in Cote d’Ivoire, Ghana, Nigeria, Senegal, Mali and Cameroon so that people from across a whole region could take part in voting on acts in the event.

We are currently talking to a large multinational about rolling out SMS-based data services.

We do information services for Millicom’s Tigo – news and sport – in which multiple content providers can log into a single platform and we can deliver to several countries.

We’re servicing about 50,000 messages a day on our platform and we expect this to grow to 0.5 million a day by the end of the year. This growth will come from us working with a Nigerian provider so we know that there will be an 80% growth in volume based on past experience.

Some VAS players want to do everything (content and distribution) but we’ve stuck to content distribution. The more content providers you have, the more you attract because you’re not competing with your content providers.

Q: What’s the deal for content providers?

The apps that drive the messaging are free, we charge for hosting and we charge a transaction fee for actually delivering messages.

Q: What’s are the percentages?

That depends on whether you’re using our apps or just using our platform. It can vary between 10-40% of the value of the message. Typically the mobile operator gets the lion’s share based on them carrying most of the marketing costs. But it will be the usability and utility of the apps that will keep customers using them. Sometimes it’s 50% to the operator and sometimes 60-70% as they own the subscriber. Where we host the content provider, we will get 40% from the operator and pay the content provider’s share out of that.

Q: So what’s new in terms of service?

There are three things: on-demand information services, competitions and trivia supported by radio and TV and interactive TV shows. The model for information services follows what happens elsewhere. They provide things like news and entertainment, local and international sport and music, etc. There are sports journalists and syndicators. But it’s fair to say that traditional media getting into SMS in Ghana has been a little slow. So for information services all you need to do is set up an RSS feed and you can send it out over different platforms.

Q: How do you work across the region?

We use local partners. It’s a two-way thing. Other providers come to us to access other countries and we go to them to access their country. A lot of them buy our technology or they buy it from elsewhere.

Q: How does someone in say Mali survive running this kind of business?

That’s why you work with someone who is based there (and don’t open offices everywhere). That person does it as part of other businesses he runs. If the media and marketing campaign is strong, it will generate enough business for you to get enough people out there to do it.

Q: Are you talking to ad agencies?

We have an app called ad server and we’ve had various conversations but nothing has been launched yet. We want it to be easy to launch and to have a billing component. On the latter, we are already doing dynamic billing so that we can make different charges for different types of content.