Telcos increase tarrifs, Thursday, January 16, 2014

Tariffs of telecom service providers in Ghana have been adjusted upwards, despite their customers grumbling over poor service.

However, the industry’s players maintain that a number of factors have conspired to push telecom companies to increase call rates.

While MTN call rates are now GHp10.50 for on-net tariff per minute, up from GHp10, data is going for GHp10 per megabite, up from GHp9.5 per megabite.  SMS, on the other hand, is GHp5.5 and GHp4.5 for national off-net and on-net, respectively; an increase of GHp5 and GHp4 respectively.

From GHp 0.0840, Airtel call rates have moved up to GHp 0.0920 per minute.

On-net calls are calls within the same network,while off-net calls are calls from one network to another.

Although Vodafone, Tigo and Glo officials did not respond to Daily Graphic’s enquiries, checks indicate that call rates for the three companies have gone up.

MTN

With their cost of business going up due to increase in taxes, the telecos are now passing on Value Added Tax, Call Service Tax and the National Health Insurance Levy to customers.

“Increase in taxes and fees that were hitherto absorbed by MTN are now being passed on to the customer. In the past MTN absorbed the VAT, CST and NHIL payable by the customer. Due to escalating costs and higher taxes, it is no longer sustainable for MTN to continue absorbing those taxes and fees,” Mrs Cynthia Lumor, Corporate Services Executive of MTN  told the Daily Graphic via e-mail.

“MTN will continue to meet its own obligations as a service provider in accordance with the new CST Amendment Act, and pay taxes levied on the service provider to the Ghana Revenue Authority. However, taxes that are payable by the consumer will now be charged to the consumer,” she added. 

Chamber of Telecommunications CEO

Other key factors that have led to the increment, according to the Chief Executive of Officer of the Ghana Chamber of Telecommunication, Mr Kwaku Sakyi-Addo, include the depreciating cedi, electricity, call service tax and fuel. While maintaining that the chamber had no hand in determining the tariff for the various companies because of competition, he acknowledged that the cost of operation had gone up hence the telcos had to adjust prices.

“Costs have gone up. Electricity, for example …Electricity has gone up, VAT has gone up. Electricity constitutes more than 40 per cent of the telecos’ cost of operation. It is the single biggest cost to the telecos,” he said

Additionally, he asserted that fuel to power generators at the various cell sites, transport and labour costs had all gone up.

That is not all.  “There is also currency depreciation. The revenue is in cedis yet the telecos import their equipment in foreign currencies. This means what would have cost you about GH¢1.50 a year ago is now GH¢2.30 cedis,” he added.

He also intimated that even if everyone’s tariff had gone up, it would still not be uniform because every company is charging a different rate.

Airtel

The Head of Corporate Communication of Airtel, Mr Donald Gwira, shared similar sentiments.

“The cost of electricity and the depreciation of the cedi have significantly increased the cost of our operations,” he said.

He, however, stated that Airtel had maintained its flat rate policy for both on-net and other local calls.

While the calls and text messages that Daily Graphic made to Vodafone were not returned, a Tigo official asked that questions should be e-mailed but these were not answered either. Similarly, calls to Glo were not returned.  

The telecom chamber had been hinting of possible tariff increases since July, last year and warned that any attempt by the government to increase call service tax would trigger rise in call rates. Eventually, the government retreated and did not increase the call service tax.

Although most of the telecos were involved in a price war last year, there were also several issues with the quality of service they delivered. Critics of the telecom industry maintain that the pricing does not match the quality of service.

Last year, telecom services which were characterised by call drops, call breaks, network congestion and Internet interruptions, compelled some users to subscribe to more than one network. Now even text messages can take days to get to the receiver.

Reactions

“Well, it is very disgusting the kind of services that some telecom companies provide their customers. If they have increased their charges, then I think it should be commensurate with their services,” Moses Obeng Effah wrote on the Daily Graphic Facebook wall.

“They give us bad services and they have increased call rates without informing us. I'm not surprised at all. They should stop,” wrote another customer.

There are, however, some sympathetic customers. Nana Curtis is one of them. He wrote “We haven't seen anything yet,  worse things to happen. I don't blame them because the government has increased VAT unexpectedly, huge load of unnecessary taxes on Ghanaians.”