Last week, the Honourable Minister for Communication, Digital Technology and Innovation, Sam George, addressed the ongoing discussions about Telecel and AT, formerly AirtelTigo. At a press briefing, the Minister clarified that the arrangement is neither a merger nor an acquisition, but rather a restructuring aimed at addressing AT’s accumulated debts and strengthening the sector.
While the form may not qualify as a legal merger, in substance, the outcome is similar, as the two companies will operate as one entity in the market. At present, MTN holds a commanding 73.87 percent market share, while AT controls 7.82 percent and Telecel 18.3 percent. Even when combined, the new entity would account for less than 30 percent of the market—well below MTN’s dominant position.
While Elon Musk’s Starlink offers some competition in data in terms of unlimited data, its high setup limit restricts access. The central question, therefore, remains whether this restructuring can enhance competition and consumer welfare by creating a stronger rival to the market leader.
Ghana’s Telecom Market Structure
Ghana’s telecom market has long been characterized by imbalance. MTN, which entered the scene in 1996, has grown through consistent investment and risk-taking when others hesitated. MTN is now reaping the benefits from its industry and foresight. Its success has created strong network effects in voice and data services, leading to brand loyalty and inelastic demand despite higher data prices compared to rivals.
This dominance earned MTN the designation of Significant Market Player (SMP)in line with the Electronic Communications Act 2008 (Act 775). Telecel and AT, as smaller players, have struggled to keep pace, with limited investments in networks and infrastructure. Regulators have voiced concerns about this lopsided structure for years, as it risks stifling innovation and leaving consumers with fewer choices.
National Security Considerations and Resilience
MTN’s success in Ghana is undeniable. Since entering the market about 30 years, it has invested heavily, built loyal customers, and delivered reliable service. Yet its overwhelming dominance also poses risks. In today’s economy, voice, data, and mobile money are lifelines. A major outage at MTN would disrupt business, government services, and everyday life. Overdependence on one operator can therefore become a national security concern. Creating a second strong competitor through the Telecel–AT merger spreads this risk and builds redundancy into the system. It
also underlines the need to classify telecom infrastructure as critical national assets that require legal protection.
Economic Rationale for the “Merger”
From an economic standpoint, the merger-like restructuring makes sense as a way to enhance efficiency. When two smaller firms combine, they can pool resources to achieve economies of scale, reducing operating costs and freeing up funds for better pricing or service upgrades. The new entity would gain financial stability, enabling investments in technology, innovation, and customer support.
A wider network could extend coverage to underserved rural areas, promoting inclusion for those previously excluded. Importantly, this arrangement could create a stronger competitor to MTN, making the market more contestable. With greater bargaining power over suppliers and less duplication in infrastructure, this proposed arrangement might introduce dynamic pricing and new offerings, pressuring all players to perform better.
Competition Law and Policy Perspective
Competition law and policy provide a framework to evaluate such deals. Typically, merger reviews assess whether a transaction would substantially lessen competition, often using structural presumptions like reducing players from three to two. However, that rule may not apply here, as the merger involves fringe firms rather than creating a new dominant force.
In markets with one clear leader, consolidations among smaller operators are often seen as pro-competitive. For instance, in the European Union and the United States, regulators have approved similar mergers when they bolster rivalry against incumbents, provided efficiencies outweigh any risks. Ghana lacks a comprehensive competition law yet, but the principles from the NCA Mergers and Acquisitions Guidelines Bill align with this view: the focus should be on whether the deal rebalances the market without harming overall dynamics.
Consumer Welfare Dimension
Consumer welfare stands at the heart of this analysis. On the positive side, the merger could lead to tangible benefits, such as improved service quality through upgraded networks and more affordable options as costs drop. Enhanced reach might bridge the digital divide, especially in remote regions, while a healthier balance sheet allows for innovations like faster data speeds or better mobile money integration.
Yet, there are risks to consider, including short-term disruptions during integration and the potential for reduced incentives to compete aggressively with fewer operators. In a concentrated market, coordination between the remaining players could emerge, though MTN’s ongoing dominance might mitigate that. To ensure gains flow to users, safeguards are essential, drawing from economic theories that prioritize long-term efficiencies over static player counts.
Regulatory Role and Remedies
The regulatory role is crucial in guiding this process. The NCA has a history of inaction, such as not addressing MTN’s Significant Market Power status promptly after it crossed thresholds in 2015. The 2017 Airtel-Tigo merger, intended to stimulate, fell short due to insufficient follow-through on investments and oversight. Lessons from that experience, and from other African telecom consolidations like those in Nigeria or South Africa, highlight the need for proactive measures. Allocating additional spectrum to the new entity could spur competition. Moreover, passing the Competition Bill would equip regulators to tackle anti-competitive practices like price fixing or abuse of dominance.
Closing Thoughts
If handled thoughtfully, the Telecel-AT arrangement could invigorate Ghana’s telecom sector without undermining MTN’s achievements. It won’t displace the leader but might result in a more balanced playing field, encouraging medium- to long-term competitive pressures through proper investments and regulatory frameworks. The NCA should apply competition principles rigorously, approving the deal with conditions to maximize consumer benefits. Ultimately, this is an opportunity to learn from past mergers and build a resilient market where efficiency, innovation, and welfare align. After all, Ghanaiansdeserve a telecom ecosystem that serves all its citizens equitably.
Appiah Kusi Adomako, Esq
NB: The writer is a lawyer and a competition economist, and a consumer protection advocate. He is the West Africa Regional Director of CUTS International. He can be contacted via email: apa@cuts.org or www.cuts-accra.org or 0302-254-5652.
