Ghana's telecoms poised for huge growth in 2017 - Report

Ghana's telecom sector is on the brink of significant growth in 2017, fueled by the expansion of mobile internet, the deployment of new in-country cable networks, and the emerging 4G technology landscape. According to a report by the Oxford Business Group, the industry is set for a transformative year ahead. To shed light on the current state of affairs and the challenges facing the sector, Fermi Banigbe, CEO of Silver Rock Technologies in Accra, Ghana, shared valuable insights in a recent interview on CNBC Africa. Banigbe highlighted the substantial strides that Ghana's telecom industry has made in recent years, with a robust growth trajectory in mobile internet usage and connectivity enhancements. However, he also pointed out prevailing challenges related to profitability and investment, particularly citing declining profitability as a hindrance to new capital inflows. The uncertainty surrounding the policies and directives of the new government further adds to the need for major structural adjustments within the industry to foster sustained growth. One of the key areas that demand significant investment is the expansion of fifth- and sixth-generation technologies, as well as the proliferation of LTE 4G services. Banigbe emphasized the challenges faced by smaller operators in securing capital for 4G deployment, underscoring the necessity for structural reforms to address these hurdles. Additionally, the high cost of fiber-optic network transmission in the country poses a barrier to entry for smaller players, necessitating a reduction in these operational costs to facilitate a more competitive landscape. Taxes also emerged as a critical issue impacting market entrants, with operators in Ghana lamenting the elevated tax rates compared to neighboring markets such as Nigeria. The burden of communication service taxes and other levies poses a significant financial strain on telecom companies, deterring new players from entering the market. Banigbe highlighted the need for infrastructure sharing frameworks to alleviate the financial burden on potential entrants and ensure a more conducive environment for competition. Looking ahead, while the telecom sector in Ghana faces challenges, opportunities for innovation and growth abound, particularly in the realm of video streaming and on-demand services. Banigbe noted the emergence of new players in the TV service sector, with promising offerings that could disrupt traditional telecom business models. However, the success of these services hinges on the availability and quality of broadband infrastructure, emphasizing the need for continued investments in network enhancements. As Ghana's telecom industry navigates the complexities of regulatory frameworks, investment climates, and technological advancements, stakeholders remain optimistic about the sector's growth prospects in 2017. With a forward-looking approach and strategic reforms, the country is poised to leverage its telecom potential and drive economic development through enhanced connectivity and digital services.