GHANA TELECOM LOSING US$1MILLION A WEEK

Mergers, Acquisitions and Financial Results

Ghana Telecom is losing about US$1 million a week, according to a report in the Ghanaian Chronicle. According to the paper the company has gone from earning US$42 million a year on its international telephone traffic to losing US$14 million over the last four years. According to the paper’s sources in the company there are losses amounting to ¢560 billion.

In 1998, the International Telephone Traffic Revenue yielded US$42 million. The following year, it dropped by $8.14 million to $33.98 million followed by a further drop in 2000 of $7.63 million to $26.4 million in 2001. This further reduced by $7.06 million to $14.14 million last year. These figures show losses incurred in respect of international telephone calls usually made by internet service providers who apply for huge number of phone lines to run their business but in actual fact use them for these services and split the revenue with the International arm of agencies. The shocking shortfall has alarmed the government given the fact that some 100,000 new lines have been installed since 1998 by GT.

The more likely explanation is that the value of international telephone traffic has fallen consistently over the period highlighted and that "grey market" VOIP traffic is unlikely to account for more than 10-15% of the losses. Time for Ghana Telecom’s new management to get its international rates to a more competitive level and to stem the losses by making the company more efficient.