Earlier this week Qatar Telecom (“Qtel”) issued a clarification regarding recent media reports linking the telco with a bid for a 25 per cent stake in Omantel.

Omantel is set to face competition domestically as a call for interest for a second fixed licence is set to close on August 25

The Qatar incumbent stated that it has not expressed an interest in bidding for this stake, going on to clarify that as the majority shareholder in Nawras, the second mobile operator in Oman, Qtel is mindful of the Omani rules and regulations.

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Vodafone’s controversial purchase of a 70 per cent stake in Ghana Telecom (GT) for US$900 million was ratified by Ghana’s parliament on August 14. However, an informed source told Comm. the bundling of the country’s fibre backbone company into the deal has been the core reason for the widespread criticism of the privatisation.

A Vodafone statement said the number of mobile subscribers in Ghana are growing at more than 55 per cent a year, with mobile penetration currently standing at around 35 per cent.

The source described how the national fibre optic company was previously under the administration of the national power utility, the Volta River Authority, and was transformed into a separate independent entity to further extend its backbone across all the main regions of Ghana and ensure equal access to all operators.

“This was a central part of the country’s ICT policy towards ensuring broadband access to all the regional capitals,” commented the source. “The government then turned around and bundled it up with GT and looked to sell it off to one operator. Perhaps the government has ensured Vodafone will not abuse this position through some contractual clauses, but if that’s the case, they’ve failed in informing the public of such an agreement.”

The Ghanaian government will retain a 30 per cent stake in the GT, which also operates the country’s third largest mobile operator, while details of the fibre optic backbone network have not been specified.

GT’s privatisation process has attracted extensive condemnation from opposition parties in parliament since negotiations with Vodafone began in July, with opposition parliamentarians suggesting the deal grossly undervalued GT at US$1.3 billion.

“There were quite a number of highly placed individuals who were fronting other parties and investors wanting to acquire the asset. Having lost out, this (opposition to the deal) was their response,” surmised the informed source. “The opposition in parliament is definitely being fed information from these interested sources.”

At a special assembly called during summer recess to debate the deal, the 230 seat National Assembly approved the sale of GT to Vodafone with 124 votes in support versus 74 against, as not all members of parliament were present for the special session.

The parliamentary building had earlier been the scene of protesters and opposition members, while GT staff held their own demonstrations and submitted a petition urging the government to finalise the contract and save the incumbent from collapse.

Employees stated that the indebted operator needed a company with the financial muscle of Vodafone to survive the local competition, dominated by multinational players investing large sums in network rollout and the improvement of quality of service.

Ghana Telecom (GT) staff has warned Ghana’s parliament that the telco needs Vodafone’s investment to save it from collapse, as they demonstrated in support of the partial sale of the state-owned operator to UK’s Vodafone.

Employees of GT say the operator’s OneTouch mobile service is plagued by poor service and desperately needs network and equipment upgrades

Parliament had met for a special assembly during its recess period to debate the 70 per cent divestment of the government’s share to Vodafone, which had previously met strong resistance from opposition parliamentarians who argued the US$900 million deal grossly undervalued GT.

Chief manager and head of roaming at the incumbent, William Agyei, stated that the indebted operator needed a company with the financial muscle of Vodafone to survive the local competition, characterised by multinational players that were investing large sums in network rollout and improving service quality.

“I can tell you that if this deal fails, GT cannot survive for two years,” Agyei declared. “The government is investing nothing into GT as of now, but I can tell you that when Vodafone comes on board, even the 30 per cent shares to be held by the state will be worth far more that the current 100 per cent shares.”

GT staff prepared a petition to be presented to the speaker of parliament and each of its 230 members, urging the government to complete the deal with Vodafone or see the telco die.

Corporate communications manager, Gordon Wellu, added that GT was losing many corporate customers and its OneTouch mobile service was rated poorly by the National Communications Authority.

He also claimed GT’s billing and switching systems were inefficient and outdated, which led to revenue leakages, while spending on new equipment and spare parts was desperately needed to upgrade services.

Meanwhile hundreds of protestors including opposition leader and presidential candidate, John Evans Atta Mills, converged on the parliamentary building to dispute the agreement.

Sam Okudzeto Ablakwa, a member of the Committee for Joint Action (CJA), criticised the government for selling state companies without considering alternatives and said there was no guarantee foreign investment would produce positive results, citing the example of previously wholly state-owned enterprise Ghana Airways, which was privatised and shares sold to US company Ghana International Airlines and Ethiopian Airlines.

Omantel’s fixed-line monopoly will soon come to an end, as the regulator announced yesterday that telcos and consortiums interested in Oman’s second fixed-line licence only have two weeks to submit their bids.

The Telecommunications Regulatory Authority (TRA) invited proposals with a completed bid by 5pm on August 25, with the auction process and licence award expected to be completed by late October.

Oman’s mountainous terrain presents a challenge to the new operator’s infrastructure rollout

The Class 1 fixed-line licence is being offered as a 25-year build-and-operate contract, and a similar 15-year contract for broadband services.

Pre-selection criteria states bidders must have been in operation for more than two years, and have at least 300,000 active fixed subscribers and net assets of US$200 million. Interested parties may be 100 per cent foreign owned with no Omani partner required, however, no association with Omantel is allowed.

Regulatory official, Naashiah Bint Saud Al Kharusi, stated that the provider that plans to invest the most money in the backbone would have the competitive edge in the auction. She added that the successful bidder would have to pay seven per cent of gross revenues to the government as royalty and an upfront fee of OMR500,000 (US$1.3 million) upon selection.

“Initially the new operator can lease facilities from Omantel but we would progressively like the new operator to have its own infrastructure,” Al Kharusi commented.

However, the attractiveness of such a package is arguable, given the mountainous terrain in Oman, which poses challenges to building infrastructure across the sultanate.

Fixed-line penetration currently stands at less than 10 per cent of the 3.3 million residents.

The fixed-line auction is the latest move to liberalise the sultanate’s telecommunications market and encourage foreign investment. Last month the government announced its intention to sell a 25 per cent stake in incumbent Omantel, while five mobile reseller licences were awarded in June.

Tata Teleservices plans to spend INR80 billion (US$2 billion) over the next two years on its new GSM network and existing CDMA operations, in a bid to grow its subscriber base six-fold by 2011 to 155 million.

Tata Teleservices plans to build a nationwide GSM network in India, but has been delayed by the allocation of spectrum.

Approximately INR60 billion will be spent on a new GSM network to be launched by the end of the year, which the operator’s managing director, Anil Sardana, expects will garner 55 million users within three years.

The remaining INR20 billion will be utilised to upgrade the existing CDMA network with the view to counting 100 million CDMA subscribers on the network within three years. Tata currently has around 26.3 million subscribers.

Tata Teleservices applied for a pan-India GSM licence, but to date has only been granted radio spectrum in five of the country’s 22 licence circles, due to delays from the government.

“We do understand that there are security concerns in some of the states/circles where spectrum cannot be allocated,” Sardana commented. “But wherever it is available there should not be any delay as the government had earlier announced in January that enough spectrum is available in most of the circles to accommodate all the new players, as well as to meet the needs of the existing operators.”

Sardana added that the delay in allocation in other circles was placing the operator at a “competitive disadvantage” as its arch-rival Reliance Communications completed a soft launch of GSM services last week.

Tata Teleservices has also announced plans for the development of a WiMAX network covering 15 cities by 2009.