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Telecoms Inflation Lowest in Ghana
From: Ghana/Samuel Nii Narku Dowuona/Adom News          Published On: November 7, 2012, 18:00 GMT
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Telecoms Inflation Lowest in Ghana

CPI changes in all key sectors/commodities constituting Ghana’s CPI pot Source: Ghana Statistical Service, 2012

Inflation in the Communications industry in Ghana now stands at 0.6 per cent, which is the lowest among all the key sectors in Ghana, according to the Consumer Price Index (CPI) from the Ghana Statistical Service.

The near-zero growth in telecom inflation in Ghana has produced a stabilization effect on Ghana’s global CPI, and has also impacted positively on national inflation levels.

The CPI from the Ghana Statistical Service, covering the period between January and July 2012 indicate that, while Telecoms recorded a stable inflation of 0.7% each month, Transportation chalked some 19% inflations being the highest commodity group in country.

Electricity, which constitutes some 50% of the operational cost of the telecom companies, recorded an 8% average inflation over the same period.

The CPI also showed that in August and September 2012, Telecoms inflation dropped even further to 0.2%, with the highest commodity group still being Transportation, which rose marginally to 19.4%.

Meanwhile, between the first and third quarters of the year, Inflation on Education service stood at 10.2%, Food and non-alcoholic beverages, 4.7%, Hotels and Restaurants, 7%, Health, 8.6%, Alcohol and Tobacco, 15.1%; Recreation and Culture, 14%.

The others are Clothing and Footwear, 13.8%; Furnishing and Household equipment, 14.1%; Housing, Water and Gas, 8% and Miscellaneous Goods and Services, 15.9%.

The CPI showed that while the cost of service kept rising in all sectors of the economy, telecom tariffs keep falling due to stiff competition in the industry.

Globally, telecom tariffs keep falling while the cost of operations for the telecom industry keeps rising.

According to the Affordable Mobile Communication Study by Nokia in 2011, Ghana has one of the lowest telecoms tariffs in the world, meanwhile up to 38% of telecom operators’ revenues go into taxes in Ghana.

According to the Ghana Chamber of Telecommunications, the telecoms operators have invested a total of US$5.5 billion in Ghana so far, and have created over 1.5 million direct and indirect jobs.

The sector is responsible for 10% of government tax revenues, and contributes a higher percentage of GDP than agriculture does, even though the Ghanaian economy is predominantly agriculture based.

The telecom operators have been advocating for the abolishment of the double tax regime under the communications service tax (talk tax). They also want the 20% import tax on SIM cards abolished because the reasons for that tax are unjustifiable.

The telcos have also been negotiating with local government agencies for some leniency in the charges and levies on installations of infrastructure meant to extend and improve the quality of voice and broadband services across country.

Meanwhile the telcos are also hustling with hundreds of cable cuts, particularly due to road construction, costing the players up to GHC10million a year in repairs and replacement.

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