A member of Parliament’s Communication Committee and the Member of Parliament for the Kumbungu Constituency, Ras Mubarak has raised concerns over government’s decision to buy Telecom company, AirtelTiGo.
Speaking in an interview on Accra-based Joy FM, Mr. Mubarak stated that the decision by government to take over the telecommunication company thereby venturing into telecom business does not promote fairness of competition in the telecom sector since government is the regulator.
In his assertion, government’s participation in the telecom business will disadvantage other companies in the industry and may kick them out of business as they could be discriminated against in the distribution of resources.
“Government is the referee in the business. So, if you have the referee also coming in as a player, then it raises issues of fairness in competition. There are other players in the industry and one might wonder whether government is not overreaching its hand. You have some unfairness in the telecom industry where spectrums have, for instance, been sold to one player giving that player extra mileage over other players. If government is coming in to take over AirtelTiGo, there are genuine concerns by other players in the industry whose business could also go bust as a result of government being the referee and at the same time, the player,” he told Evans Mensah, host of News Night.
While demanding that government explained to the people of Ghana the rationale behind the decision, the MP for Kumbungu also raised concerns over the liabilities of AirtelTiGo admonishing government against bailing out non-performing companies as such bailouts could encourage heads of other companies to deliberately run them down in anticipation of government’s intervention.
“AirtelTiGo (has) huge liabilities. Government should not be in the business of bailing out companies that have not been run well. If you go about doing that, you will end up having a situation where people will just allow companies to fail because they know that government will bail them out. We should not reward Chief Executive Officers (CEOs) with bailouts especially if they haven’t run their companies in ways that makes them profitable,” he said.
In a statement issued on Tuesday, October 27, 2020, the board of Bharti Airtel announced to the Bombay Stock Exchange that it has cleared the sale of its Ghana Joint Venture – AirtelTiGo – to the government of Ghana.
Bharti Airtel is taking an impairment charge of about $25 million for the transaction which will result in government acquiring 100 percent shares of AirtelTiGo along with all its customers, assets and agreed liabilities.
Government in a statement said it will temporarily operate the company in the best interest of Ghana, and ensure the protection of the interest of all employees, customers and stakeholders, and the continuation of the digital transformation in the country.
The statement explained that government entered into the agreement to safeguard thousands of jobs of Ghanaians since Bharti Airtel is pulling out of business while stressing the need for the telecommunication sector to remain healthy, vibrant and competitive.
