A competition economist has endorsed the economic rationale for Ghana’s planned merger between AT Ghana and Telecel, despite Communications Minister Samuel Nartey George’s insistence that the arrangement is not technically a merger.
The government announced this week its intention to combine the two struggling telecommunications operators in what officials describe as a response to financial difficulties rather than a conventional merger. However, industry experts argue the distinction matters less than the potential benefits.
Appiah Kusi Adomako, West Africa Regional Director of CUTS International and a competition economist, told The High Street Journal that pooling the companies’ resources represents the most viable path forward for both operators in Ghana’s challenging telecommunications landscape.
The combined entity would command approximately 26% market share compared to MTN’s dominant 79% position, according to recent industry analysis. This disparity underscores the competitive challenges facing smaller players in Ghana’s telecom sector.
“From an economic standpoint, the merger-like restructuring makes sense as a way to enhance efficiency,” Adomako argued. “When two smaller firms combine, they can pool resources to achieve economies of scale, reducing operating costs and freeing up funds for better pricing or service upgrades.”
Minister George emphasized during staff engagements that the process stems from what he termed “a force majeure situation” rather than strategic consolidation. He has assured staff and customers that their interests will be fully protected during the transition.
The government has appointed accounting firm KPMG to assess AT Ghana’s financial position, including outstanding debts and service obligations. Industry reports suggest AirtelTigo has been hemorrhaging over $10 million in losses, highlighting the urgency behind government intervention.
Adomako believes the arrangement could deliver significant benefits beyond immediate cost savings. He argues that enhanced financial stability would enable the merged entity to expand network coverage to underserved rural communities, advancing digital inclusion objectives that have long challenged Ghana’s telecommunications development.
“The new entity would gain financial stability, enabling investments in technology, innovation, and customer support,” he explained. “A wider network could extend coverage to underserved rural areas, promoting inclusion for those previously excluded.”
More significantly, the economist suggests the merger could inject genuine competition into a market where MTN’s overwhelming dominance has raised regulatory concerns. The government is banking on $600 million to make the merger work, representing a substantial public investment in telecommunications infrastructure.
“Importantly, this arrangement could create a stronger competitor to MTN, making the market more contestable,” Adomako noted. “With greater bargaining power over suppliers and less duplication in infrastructure, this proposed arrangement might introduce dynamic pricing and new offerings, pressuring all players to perform better.”
Consumer benefits could include lower prices, expanded coverage, and improved services as increased competition forces all operators to enhance their offerings. The restructuring also eliminates costly infrastructure duplication that has historically burdened smaller operators attempting to compete with MTN’s established network.
The merger process will involve complex technical migration and workforce restructuring, with full integration targeted for completion by the end of 2025. This timeline suggests significant technical and operational challenges ahead as the companies work to harmonize networks, systems, and services.
The development occurs as Ghana seeks to strengthen its telecommunications sector amid growing digital transformation demands. Success of the merger could serve as a model for similar interventions in other West African markets where dominant operators face limited competition.
Industry observers will closely monitor whether the combined entity can effectively challenge MTN’s market position while delivering improved services to consumers across Ghana’s diverse geographic and economic landscape.
