Telecoms: Government goes full throttle to modernize the sector

Telecom Panorama
Monday, 05 February 2018 14:20
Cina Lawson, minister of Posts and Digital Economy Cina Lawson, minister of Posts and Digital Economy

(Togo First) - Presently, telecommunications contribute 8% to Togo’s gross domestic product (GDP) and according to Pyramid Research’s forecasts, this sector should record an average annual growth rate of 6.5% in 2015-2020, thus generating $617 million over the period. This performance will be driven by mobile voice and fixed internet services, which are expected to grow at a rate of 19.9% per year average, over the period considered. 

Moreover, with the potential arrival of a third operator, competition will surely get ruder. So far, rates of Togocel and Moov Togo for mobile services are among the highest in West Africa. As a result, the government capped the rates to make communication easier and more affordable, relatively.

Still, rates for international call in Togo are relatively high compared to those of neighboring countries. Indeed, a comparative study conducted by the sector’s regulatory organ shows that Togo’s rates for international calls (ECOWAS, France and other European countries, Canada and US) are slightly higher than rates applied by Burkina Faso, Côte d’Ivoire or Senegal. The arrival of a new operator could thus effectively bring these mobile communication rates down. In this regard, there are talks about the intentions of South African giant MTN, already leader in Benin and Nigeria. However, let’s recall that process for awarding of a third mobile telephony license has been announced since 2009.

In the sector of posts, restructuring should result in private management of postal services.

As for information and communication technologies, the government still works to improve access to IT equipment and consumables to all. In this framework, an exoneration was applied to IT equipment imports, in the 2017 fiscal year. However, government had to go back to its initial tax policy, since last Jan. 1, as the measure produced mixed results.

Concerning internet connectivity, Togo records a good performance but there is still much work to do. Data transmission (Internet) is mainly dominated by Togo Telecom and Café Informatique who provide up to 100Mb/s bandwidth and supply most of the other providers (Moov, Togocel, etc). Two other operators, including Téolis, should start operating in February 2018.

 

A market dominated by two companies

Up till 1986, it was a department of the ministry of posts and telecommunication that was handling telecommunication activities in the country. That year, this task was trusted to the Posts and Telecommunications Office of Togo (OPTT). In 1991, this office became a public company, but was subjected to management rules applied to private companies. It would be later in 1996 that major projects for the modernization of the telecom sector would commence.

The sectoral policy declaration adopted by the government in 1996 resulted in the complete restructuring of the sector. This led to the division of OPTT into two distinct State-owned firms. The first would be in charge of posts, that is Société des Postes du Togo (SPT) and the second, Société des Télécommunications du Togo or Togo Telecom, would handle telecommunications, and later become a holding.

However, it is in 1998 that the telecoms industry would experience its true revolution. The establishment of a regulatory organ, the Posts and Telecommunications Regulatory Authority (ART&P) paired with the liberalization of the telecoms market participated to the diversification of products and services. Togocel, subsidiary of Togo Telecom, lost its monopole and now, the market is characterized by a duopoly composed of Togocel (73% of the market’s shares) and Moov Togo (27%). According to predictions, this situation will continue until 2020.

In July 2017, the government has adopted a number of measures aimed at making Togo Telecom a holding baptized Togocom, which would define strategy for all its distinct units, ensuring optimal efficiency. Togocom was provided with a social capital of one billion CFA and will be headed by Affoh Atcha-Dédji.

En juillet 2017, le gouvernement a adopté une série de mesures destinées à la transformation du groupe Togo Telecom en une Holding dénommée Togocom, garante de l’efficacité de l’ensemble de ses filiales dont elle définit la stratégie.  Togocom a été dotée d’un capital social de 1 000 000 000 Fcfa et sera dirigée par Affoh Atcha-Dédji.

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