ACG Telesystems (Westel)

cancelled

Western Telesystems Limited (Westel) was awarded its 20 year license as a national operator in December 1996. The company obtained its license through a competitive bidding process when it paid US$10.1 million. ACG Telesystems was a consortium led by the U.S. company Western Wireless International (56%), Adesemi Communications International (10%), and state-owned Ghana National Petroleum Corporation (34%). The auction of the license was part of a reform to end the monopoly of Ghana Telecom and promote private participation in the sector. However, the basic phone services (fixed local and long distance) were to be provided by only these two companies, at least until 2001. With a US$2 million supply contract signed in May 1998, World Access became the prime contractor of ACG Telesystems for the initial roll-out of its wireless local loop network. In January 1999, the company launched its network in Accra-Tema, after overcoming some difficulty with interconnection agreements with Ghana Telecom. Westel's operations had been hampered by its problems with the telecom regulatory authority, the National Communications Authority (NCA). Under the terms of the license, Western Telesystems Limited was required to meet certain customer levels and build-out requirements by January 2002. The company was committed in its license to rolling out some 55,000 lines. However, by February 2003 it had rolled out only 5,000 lines in the capital, Accra. The company alleged that due to the inability of the regulator to enforce interconnection with the incumbent operator all developments were stifled. In accordance with the rules of the NCA, it had to pay a penalty of about US$25 million. By 2003, the fines for Westel cumulated to US$71 million for not meeting the build-out requirements. In December of 2003, Westel had to negotiate the debt with the NCA and seek some waivers. The NCA granted the request and reduced the debt to US$25 million. Westel paid part of this but had been unable to pay the balance in 2004. That problem had virtually removed Westel from the competition in the fixed line market in Ghana. In November of 2004, Westel announced that it had filed an international arbitration claim against government for the total expropriation of its investment in the company. Westel argued that its move was the result of the actions of government and National Communication Authority which they claimed violated the terms of its license and obstructed the implementation of its business plan thus causing it financial harm estimated at US$190 million. In September 2005, ACG Telesystems Limited, the majority shareholder in Westel, sold its entire 66 2/3% shares to its minority shareholder, Ghana National Petroleum Corporation (GNPC) that previously owned 33 1/3% shares in Westel. GNPC was consequently the sole owner of the 100% shares in Westel. Need more investment for this project. Claiming US$190 million in damages... we have 12.1 million total. On September 2005, ACG Telesystems Limited, the majority shareholder in Westel, sold its entire 66 2/3% shares to its minority shareholder, Ghana National Petroleum Corporation (GNPC) that previously owned 33 1/3% shares in Westel. GNPC is consequently the sole owner of the 100% shares in Westel. None