Why reject US$1bn Rektron investment? Minority questions minister’s alleged deal with Telecel

The Future of AT (Formerly AirtelTigo) Under Scrutiny Ghana's minority party in parliament has voiced serious concerns regarding the go...

The Future of AT (Formerly AirtelTigo) Under Scrutiny

Ghana's minority party in parliament has voiced serious concerns regarding the government's handling of the future of AT, previously known as AirtelTigo. These concerns stem from reports that the Minister of Communication and Digitalisation, Samuel Nartey George, allegedly rejected a substantial US$1 billion investment proposal from Afritel/Rektron. Instead, the Minister is reportedly favoring a deal with Telecel.

The minority caucus has accused the minister of overseeing a process fraught with opacity and chaos, potentially endangering a crucial national asset and putting thousands of jobs at risk.

Accusations of Poor Governance and Risk to the Telecom Industry

During a press conference held in Accra, the minority caucus articulated their concerns, alleging that the minister's actions demonstrate a lack of sound corporate governance. They believe this jeopardizes the entire telecommunications industry. Consequently, they are demanding an immediate cessation of the proposed transaction with Telecel and are calling for a comprehensive parliamentary inquiry into the matter.

The opposition party has further outlined what they describe as a "pattern of oscillating, inconsistent, and incompetent" policy decisions made by the minister. They claim that these decisions have plunged the state-owned telecom company into a state of uncertainty, significantly diminishing its value.

A Troubled History and a Search for Investment

The caucus recounted the history of AT, noting that the company was established in 2018 through a merger and subsequently acquired by the state in 2021 for a symbolic US$1. According to the caucus, this acquisition was intended to safeguard over 500 direct jobs, protect the interests of 5.1 million customers, and maintain a competitive landscape within the telecom sector.

The long-term strategy involved securing a strategic private investor to inject capital and revitalize the business.

A Frustrated Investment Proposal

Mathew Nyindam, the Ranking Member on Parliament’s Communications Committee, explained that a transparent process, led by Deloitte Ghana, had shortlisted several potential investors. Afritel/Rektron, he stated, had proposed an initial investment of US$150 million for an 85 percent stake in the company. Their total commitment was up to US$1 billion over five years, with the goal of modernizing AT’s network and launching nationwide 4G services.

However, Mr. Nyindam expressed his dismay that since Mr. George assumed office, he has demonstrated a lack of clear policy direction. He initially pledged government investment in AT, then announced a strategic partnership with Afritel/Rektron, even signing a memorandum of understanding (MoU). However, he later backtracked to seek advice from the Attorney-General and ultimately shifted toward a merger with Telecel.

"This is not merely about the sale of a company; it is about protecting a national institution," Mr. Nyindam emphasized. "We express our deep concern over the rejection of a substantial, long-term investment from Afritel/Rektron in favor of a merger with Telecel – a company that has a record of unfulfilled investment promises and significant debt."

Concerns Over Telecel's Commitment

The minority party questioned the minister's judgment, highlighting that Telecel had pledged only US$50 million towards network upgrades post-merger – a significantly smaller amount compared to Rektron's offer.

They also criticized what they perceive as the government's misguided attempt to create a duopoly to compete with MTN. They warn that this would reduce consumer choice and disproportionately affect low-income Ghanaians who rely on AT's affordable tariffs.

Safeguarding a Strategic National Asset and Potential Job Losses

The minority party stressed the importance of safeguarding AT, cautioning that the proposed merger could jeopardize the livelihoods of 300 full-time employees, 200 contract staff, and more than 10,000 indirect workers.

They also warned that a potential shutdown under the pretext of force majeure could lead to the termination of the World Bank-funded US$50 million Digital Infrastructure Venture (DIV) Project. This project connects over 900 district offices, hospitals, police stations, and other public institutions using AT's network infrastructure. Its collapse, they cautioned, would severely impact public service delivery nationwide.

Legal Ramifications and a Warning to Telecel

Mr. Nyindam further cautioned the Telecel Group that any acquisition of AT through "unlawful, non-transparent, or irregular means" would be considered illegitimate and could face "review, reversal, and possible legal action" under a future government.

Demands for Transparency and Accountability

The minority party concluded by outlining four specific demands:

• Immediate Suspension: An immediate suspension of the ongoing transaction with Telecel.

• Parliamentary Investigation: A full parliamentary investigation into the deal.

• Disclosure of Information: Disclosure of all related agreements and reports.

• Urgent Government Intervention: An urgent government intervention to address the service disruption caused by tower company ATC.

Finally, they called on President John Dramani Mahama to intervene and ensure that the communications minister makes decisions regarding AT's future through a transparent process that protects this vital national asset.