MD explains to lawmakers how national telco declined

Gamtel managing director, Lamin Tunkara, has informed lawmakers that the company’s viability was significantly threatened after the liberalisation of the international gateway which generates about 80 percent of its revenue in 2019. 

Following this policy change, he disclosed Gamtel suffered significant revenue cuts from over D1 billion to D297 million.

According to officials, Gamtel gets only 5 percent share from the gateway proceeds, which is an average of “D1 million every month.” However, they alleged this 5 percent was recently reduced to 2.5 percent while the other half is allocated for the government’s security reform levy.

Lamenting the significant constraints that impeded Gamtel over the years, MD Tunkara explained: “Gamtel was heavily dependent on the revenue sources from the gateway. And prior to the liberalisation, the country gets over a billion dalasi for the entire period until the decision was made to liberalise it in 2019. When it was liberalised in August 2019, we were able to get over D860 million and the following year, the revenue went down to D297 million. When the gateway was being liberalised, there were conditions attached that the staff cost should be cut and right sizing is done hence 50 percent of our revenue goes to staff cost. This exercise requires funding and the World Bank provided about D280 million for the government to be able to do that exercise but it was not conducted. We understand according to the government that there were other areas they put those resources in.

So with our main revenue source taken from us, we are still stuck with that staff cost and that cost is still there.”

The MD added that following the liberalisation, Gamtel decided to diversify its investment into fibre connection to bring back revenue by connecting customers across the country.  “But our challenge is financing. Fibre cables are expensive and each 100 metre costs about D500,000 and if you want to connect the entire Greater Banjul Area, it will cost a lot of money and unfortunately our revenue is only generated from the services we sell and take that money and re-invest it into operations,” he stated.

Tunkara said funding for the successful implementation of this new strategy would cost $5 million but despite it being approved and endorsed, funds remain unavailable.

According to Gamtel officials present at the meeting, the company is also plagued by other fundamental issues such as ageing network infrastructure, inadequate investment, settlement of liabilities, debt recovery and high cost of maintenance for fibre cuts.

They also reported that persistent reports of Gamtel getting privatised created an atmosphere of uncertainty, forcing many staff to vacate the company.

Communications and Digital Economy Minister, Ousman Bah, reportedly told lawmakers earlier this month that the government has agreed and passed a cabinet paper to “privatise Gamtel and sell Gamcel outright.”

He averred that the government “does not have funds to continue to support” Gamtel and Gamcel since they are “highly indebted,” requiring the need for a private partner to inject investment.

Source: The Standard  

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