Local contractors up in arms against Airtel Ghana

Some local contractors providing various Value Added Services (VAS) to Airtel Ghana are currently raging with anger over an executive decision by the telecom operator to allegedly abrogate its contracts with local companies to engage the services of foreign companies.

It must be noted that some of these companies that are being kicked out of business had longstanding relationship with the teleco company even when it used to be Zain before it was taken over by Airtel in 2010. They offered services such as text messages, supplying equipment, shortcodes, caller ring back tones, etc.

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Industry watchers say the decision would keep many local companies out of business as well as put thousands out of job.

Interestingly, when it comes to revenue share for third party in the telecommunications sector, Airtel pays the least to its service providers. Whilst the revenue share for the operator in the case of MTN is 60%, and 40% for the third party; in the case of Airtel it is 70% – 80% for the operator, and 30% – 20% for the third party depending on the contractual agreement.

The company’s decision is also seen as a smack on government’s face, thus making nonsense of its effort to create an enabling environment to boost the growth of local industries. Government has been working hard over the years to compel multinational companies operating in Ghana to use more local contents in their operations.

For instance, in August 2010 the then Minister of Communications Haruna Iddrisu issued a 30-day ultimatum to telecom operators to ensure that all their airtime voucher or scratch cards are printed locally.

He noted that as part of their licenses regime, telecommunications operators are supposed to work towards technology transfer.

However, the story seems different when it comes to Airtel Ghana.

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Meanwhile, Corporate Relations Manager at Airtel Ghana, Kwame Gyan has confirmed the abrogation of contracts with some local companies to Myjoyonline but said it was a group decision, which he said goes beyond the powers of the country office.

“There is no plan or whatsoever in place to deliberately take jobs from the local companies to give to the foreign ones.”

He said, for instance, the company rather respected the government decision to ensure that scratch cards are printed in Ghana, by ensuring that scratch cards are not printed outside the country.

He said the company considers two issues before signing a provider or abrogating a contract: the product should be compatible with their system, and also profitable.

“What sometimes happens is that we have some cases that from the group’s office we have the group getting certain contract that cut across [countries]… so there are times when some of the VAS that we have, have been given to us from the group level to serve either the Anglophone part, some are also serving both Anglophone and Francophone.”

Source: myjoyonline.com


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2 thoughts on “Local contractors up in arms against Airtel Ghana

  1. I still think specialization is way better than trying to do everything themselves. They need to realize and concentrate on what they know better and leave the 3rd party help them out in other sectors.

    • Jonathan, that’s because you’re looking at it from the 3rd parties perspective! But unfortunately, that’s not how Telecoms see it. They look out for their own interest first before they consider other industry players.

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