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A recent directive, by the National Communication Authority (NCA) to telecommunication companies to charge GHp4 per minute, will kill businesses and affect over 10 million subscribers, Vodafone Ghana has warned.

The company believes the current move by the NCA would have a negative impact on the telecom industry, since the directive could disarm their ability to monetise GH¢80 million annual capital investment.

Vodafone Ghana expressed the concern over the “On-net price regulation” by the NCA at a media round table discussion held in Accra last week Thursday.

The Vodafone Director for External Affairs, Gayheart Mensah, speaking at the programme, described the NCA action as over regulation of the industry, saying, “this is a small industry whereby every week and every month one directive or the other coming through from the NCA.”

He added that if those directives from the NCA were targeted to improve operations of industry players and to satisfy consumers, they would have no problem, but most times, it restricts their wheel power to service the nation effectively.

Mr. Gayheart noted that many players would face shutdown if events continue to take this turn, adding: “We are already overcrowded. If you compare the number of operators in Ghana and what exists in other markets, it gives concern for worrying, and it creates a situation where operating in the country becomes extremely difficult because of the fragmentations.”

The Vodafone Wholesale Managing Director, Julius Owusu-Kyeremateng, added that the new tariff would reduce talk time and increase the cost of doing business in the country.

He believes that pricing of services by the telecoms should be driven by competition, not regulation. Mr. Owusu-Kyeremateng, in a power point presentation, asserted that 75 per cent subscribers will suffer if the NCA continues with the directive.  “If the directive is enforced, the market will respond by dropping the pay-as-you-go rates, as the need for differentiation becomes fierce,” he stressed.

The directive, which is actually targeting “on-net price”, a fee a subscriber is charged for calling another consumer on the same network, was said to be too much for the consumer, since the government already has a tax component of almost 27% on the scratch cards.

The telecoms, however, described the directive as a draining one, as Mobile Network Operators have different commercial strategies and approaches to suit consumer preference. “The directive weakens the telecom industry players, as OTT players gain substance in the market, eroding industry revenue in the end,” Mr. Owusu Kyerematey stated.

The directive, as projected by the NCA, will also increase customer agitation, since industry retail price will surge by over 75%, a seeming threat especially to businesses (SMEs), which are a catalyst to economic growth, income.

“Definitely, as it seems, operators will gravitate towards a common commercial model, thus it would encourage homogeneity in the market, resultant limitation in innovation, whereby there would be no competition, increase the cost of doing business, reduced revenues and taxes. Also, it would erode industry profitability, investment and job opportunity,” he noted.

He added that most people, instead of using airtime, would opt to communicating through social media platforms like facebook, Viber, Watsapp, and Tango among others, which are cheaper.