WESTEL now a fully state-owned company

16 Feb 2006

Ghana’s beleaguered second national fixed line operator Western Telesystems Company (WESTEL) has become a fully-owned state enterprise following the government’s acquisition of the two-thirds equity stake held by ACG Telesystems Ghana, via the Ghana National Petroleum Company (GNPC). The Ghanaian government already owned one-third of WESTEL. The purchase means that the state is now the sole shareholder of both the country’s fixed line telecoms companies: it recently bought back the 30% stake in Ghana Telecom (GT) it sold to Telekom Malaysia in 1997, after relations between the two soured.

WESTEL was awarded the second national operator’s licence in 1996 and granted a five year duopoly on basic telecoms services alongside incumbent GT. The company is licensed to provide fixed and wireless telecommunications services throughout Ghana, including basic phone services, cellular, paging, international long-distance, payphones, data communications, private networks and satellite communications, but it did not launch services until late 1998 due to GT’s refusal to connect it to the national PSTN. Since then the telco has been blighted by bureaucratic disagreements and a lack of investment.

Originally a wholly owned subsidiary of the Ghana National Petroleum Corporation (GNPC), Westel was floated in an IPO following the opening up of the market. Western Wireless International (WWI) of the US took a majority stake, but in its allotted duopoly period installed fewer than 3,000 of the 50,000 lines stipulated by its concession and its own target of 100,000 lines per annum. WESTEL has invested over USD26 million in its wireless in the local loop (WiLL) network, but this is well short of the USD40 million to USD75 million needed to fulfil its rollout obligations, and, as a result of its lack of funds and inability to attract investment, its coverage is limited to the Accra and Tema Metropolitan areas. Its initial strategy was to use pre-paid cards on both its own and on GT’s network, thus offering national services on the back of GT’s network, but this was thwarted because of the inability of the two parties to come to an interconnection agreement.

Ghana, AirtelTigo, Vodafone Ghana