Announcement came in the form of an SMS circular to customers across the country today, November 24, 2023. The date of the circular means MTN has given customers only four days notice about the planned increase in price.
It is still not clear what the rate of increase will be, but the company attributed the decision to increase prices to rising operational cost, without stating exactly what those cost lines are.
It would be recalled that in February this year, MTN Ghana increased data and voice tariffs across board, citing same reasons – rising operational cost.
In the course of the year, MTN also attempted to increase the maximum fee cap for mobile money cash out transactions from GHS10 to GHS20, but had to suspend it due to a huge public outcry and an intervention by the Network of Communication Reporters (NCR).
MTN has been ordered by the industry regulator, National Communications Authority not to have the lowest prices on the market, due to its significant market power (SMP) status. However, MTN does not cite that as the reason for the price increase, but rather operational cost.
MTN was also part of the telcos which recently decided to pass on the 5% communication service tax (CST) to customers after absorbing it for a while.
Meanwhile, in its annual reports, MTN posts very impressive revenue and profits, barring the operational cost. The company’s stocks have also been doing great and shareholders keep getting some juicy dividends.
Analysts are therefore concerned as to why subscribers have to keep bearing the brunt, particularly from an operator which has enjoyed the biggest and longest loyalty of Ghanaians, commanding an overwhelmingly huge market share across board.
Tax Burden
It is however important to note that spokespersons for the telcos, Ghana Chamber of Telecommunications has recently put out their annual total tax report indicating that the industry paid out over GHS6 billion in taxes, fees, levies and other payments to government in 2022 alone. That amount constituted over 46% of their total revenue.
Again, the industry runs mainly on imported equipment, hence the value of their earnings is impacted negatively by forex rate.
There has been huge concerns about power cost to the industry as well. Power cost keeps rising in Ghana and that hits the bottom line of the telecom industry heavily, even though the industry is a big a enable diving growth virtually across the entire economy.
The Chamber has therefore been calling on government to ease the tax burden on industry players so they could also pay it forward to consumers in the form of lower tariffs. That call has not been heeded to yet, hence the repeated increases in industry tariffs.
Indeed, at the recent Mobile World Congress Africa in Kigali, Vice Presidents for Markets at MTN Group, Ebenezer Twum Asante also raised concerns about governments/regulators role in the rising cost of operations in the industry and the need for them to have special regimes for the industry so the benefits could be passed on the consumers as part of efforts to bridge the digital gap across the continent.
