Global Voice Group: The Most Influential African Player you Haven’t Heard Of Pos

Global Voice Group: The Most Influential African Player you Haven’t Heard Of
Posted by in African Telconomics
Over the past three months, an open conflict has opposed Senegalese fixed carrier Sonatel to international wholesale carrier Global Voice Group (GVG). The GVG-Sonatel dispute follows similar (if not as contentious) disputes in Ghana (where Vodafone loudly protested) and Cote-d’Ivoire.

In Senegal, GVG signed a deal to managed inbound international calls into Senegal. The government subsequently raised Senegal’s termination rate to EUR 0.215 per minute, from EUR 0.14 per minute, and effective tax of EUR 7 cents per minute. Under the terms of the deal, GVG receives 49% of the “tax” on incoming calls, with the government retaining 51%. The company has signed similar deals in Ghana (where termination rates rose from $0.12 to $0.19), Congo-Brazzaville and a handful of other African markets.

The impact of GVG is not inconsequential. In Senegal, local operators terminate about 100m minutes in international calls each month; the GVG tax would generate about $10m a month, around half of which would go to GVG. By our estimates, GVG generates around $7-$10m a month combined, in Congo, Togo and Guinea-Conakry. In Ghana, GVG would stand to make another $4-$5m a month.

The GVG approach is fairly cunning. The company deals directly with African governments, who are starved for cash, and can use their power to impose new rules. It rarely intervenes directly, only providing monitoring equipment and training. There is increasing resistance. Besides Sonatel and Vodafone Ghana, other operators are becoming increasingly vocal. In Cote-d’Ivoire, the government has backtracked on its initial decision to allow GVG. The regional ECOWAS organization has formally protested and requested an exemption for regional traffic. Some foreign operators are already applying reciprocity. Senegal may ultimately backtrack, but the lure of fresh revenue remains too strong for many governments to resist.

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