Network tower sharing and telecom infrastructure diffusion in Ghana - a Structure-Conduct-Performance approach

The paper answers the following questions: whether infrastructure sharing policy been able to achieve its core objective of preventing network tower investment duplication in single locations? And whether pricing strategy employed by tower owners encourage sharing? The foundation of these issues is concerned with the structure of costs for providing sharing services, the nature of contracts or other conditions for commercialization, and the clash of different buyers (MNOs) of towers spaces. The implications for the diffusion of telecom infrastructure and services to poorly covered areas of these market conditions and the conduct of the market players constitute the primary focus of this research. For assessing the market structure, the behavior of market players, and the outcome of the sharing policy, a Structure-Conduct-Performance (SCP) framework is applied. A combination of qualitative and quantitative data were collected including ten (10) employees of the network companies, tower companies, internet service vendors and the regulatory agency (NCA) for interviews and reports on 2000 out of 5750 co-location tower sites (at the beginning of 2016) across the country were analyzed. Against the expectations of the regulator, infrastructure sharing is currently not effective. For rural communities, rather than sharing amidst non-pleasant market conduct from the incumbent operators, new entrant operators have chosen to build their own towers, holding back diffusion due to single cost ownership and also defeating the purpose of infrastructure sharing policy. Factors such as market size of firms and their degree of concentration will continue to affect conduct and performance, unless there is a strong institutional incentive for undertaking mandatory access strategies to challenge dominance to induce greater competition in markets.