Mobile internet hotspots

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Mobile internet hotspots

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Country

Ghana

Sector

Technology and Communications

Sub Sector

Internet Media and Services

Indicative Return

15% - 20% (in IRR)

Investment Timeframe

Medium Term (5–10 years)

Market Size

4.4 million people in Ghana require 3G internet coverage.

Direct Impact

Industry, Innovation and Infrastructure (SDG 9)

Indirect Impact

Business Model Description

Provide affordable mobile internet in rural areas through mobile hotspot with business advertisement services.

Expected Impact

Enhance access to information and knowledge especially for rural populations through mobile hotspots financed through commercial advertisements.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Disclaimer

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Ghana

BLUETOWN enables higher standards of living through affordable internet

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Country

Ghana

Region

Ghana: Upper West
Ghana: Savannah
Ghana: Bono East Region
Ghana: Ashanti
Ghana: Eastern
Paraguay: Central
Ghana: Northern

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Sector

Technology and Communications

Development need
There are many challenges associated with achieving SDG 9 - Industry, Innovation and Infrastructure. Statistics highlight affordability and the quality of the internet as the key challenges. However, Ghana is on track to achieve two indicators: population using the internet (39% in 2017) and mobile broadband subscriptions (92% in 2018).(III)

Policy priority
The Medium-Term Policy recognizes ICT (information and communications technology) in Ghana as a key economic driver. The sector recorded significantly higher growth than others, rising by around 30% annually between 2009-2014 and reaching 10.6% of gross domestic product (GDP) in 2016.(I) The government is planning to expand national ICT infrastructure by collaborating with private sector and establishing Ghana as a regional ICT hub.(II)

Gender inequalities and marginalization issues
Ghana's gender gap in basic internet access was only 5.8%, compared with the African regional average of 49.6%. However, a wider gender gap occurs in meaningful connectivity, reaching 14%.(38)

Key bottlenecks
The main sector challenges include: black spots in infrastructure access, ICT skill gaps, unreliable access to energy, high cost of internet, lack of ICT startup incubators, inadequate regulations, poor cybersecurity, and poor access to electronics (computers, laptops).

Industry

Internet Media and Services

Investment Opportunity Area

Mobile internet hotspots

Business Model

Provide affordable mobile internet in rural areas through mobile hotspot with business advertisement services.

Market Size and Environment

Critical IOA Unit

4.4 million people in Ghana require 3G internet coverage.

4.44 million people in Ghana are not covered by 3G internet, showcasing an opportunity for market development.(35)

In 2020, 14.76 million of Ghana's estimated 31.4 million people were internet users. This is 1 million more users (up 7.5%) than in 2019. (25), (32)

46.1% Ghanaians own a smartphone(29), and 40.8% of the population conduct mobile money transactions(30).

Indicative Return

IRR

15% - 20%

Benchmark statistics for telecommunication services (including internet) estimate a return rate of 18% -22%. This rate is a benchmark calculated as a cost of equity that includes a country risk premium, reflecting an average return required by investors.(31)

Investment Timeframe

Timeframe

Medium Term (5–10 years)

Given the infrastructure and capital expenditure requirements, as well as the required large-scale application, the business model is expected to require a medium to long term timeframe, depending on its specific orientation.

Market Risks & Scale Obstacles

Business - Supply Chain Constraints

Limited use of ICT (information and communications technology) as a tool to enhance the management and efficiency of businesses, and provide public services (13)

Market - uptake barrier due to privacy and data security concern

Inadequate online privacy and data security mechanisms hindering adoption of technology (14)

Sustainable Development Need

Digitization is considered to be a major driver of economic growth. It has a transformative impact and it is a significant factor for sectoral development. A mobile phone business model can be applied e.g. for providing electric power to off-grid homes, agricultural innovation, education and addressing teacher shortages as well as healthcare delivery. (V)

The Ghana Investment Promotion Centre identified the need for ICT (information and communications technology) facilities and infrastructure to be deployed nationwide. This includes providing software, extending the broadband network and providing broad computer access for rural students.(1)

Gender & Marginalisation

Underprivileged communities, especially students from poor backgrounds, suffer from access barriers to information and knowledge.

Expected Development Outcome

Improved internet connectivity, improved human capital development due to improved access to information and learning opportunities

Facilitated technological innovations and digital literacy, accelerated digital transformation of the country

Decreased asymmetry of information and informational gaps among populations

Gender & Marginalisation

Reduced digital gender gap

Reduced inequalities in digital access

Primary SDGs addressed

4 - Quality Education

9 - Industry, Innovation and Infrastructure

17 - Partnerships For the Goals

Secondary SDGs addressed

5 - Gender Equality

8 - Decent Work and Economic Growth

10 - Reduced Inequalities

Directly impacted stakeholders

People

Rural communities benefitting from easy access to information and knowledge

Gender inequality and/or marginalization

Women and children with the opportunity to overcome access barriers to connectivity

Corporates

Micro, small and medium enterprises (MSMEs), farmers, agribusinesses and other actors along the trade value chain benefitting from greater opportunities to conduct business

Public sector

National education system

Indirectly impacted stakeholders

Corporates

Businesses with an opportunity to finance impactful opportunities and position themselves in communities with emerging purchasing power

Outcome Risks

Possibility of cybercrime and phishing, because mobile hotspots providing wifi services are more vulnerable to hacker attacks than private cable connections (11)

Impact Classification

B—Benefit Stakeholders

What

Provision of affordable mobile internet, which contributes to digital inclusion and results in access to information, reduced transaction costs, and efficient and effective services provision.

Risk

Inappropriate pricing strategy may be an obstacle for a wide scale roll out of the project. Moreover, potential privacy and confidentiality related risks need to be addressed.

Impact Thesis

Enhance access to information and knowledge especially for rural populations through mobile hotspots financed through commercial advertisements.

Policy Environment

Coordinated Programme of Economic and Social Development Policies (CPESDP) 2017-2024: This programme announces support for digital infrastructure development and mainstreaming ICT (information and communications technology) in the public sector to position the country as a regional tech hub.(6)

National Science Technology and Innovation Policy 2017-2020: This policy has the goal of acquiring skills in high technology areas and integrating them into known technologies. It aims to promote innovation within the educational system (ICT-driven education) and all sectors of the economy.(7)

National Broadband Policy and Implementation Strategy 2012: This strategy aims to develop world-class ICT infrastructure in Ghana and increase the overall capacity for the transmission of data, voice, video and internet services nationwide.(8)

ICT for Accelerated Development Policy (ICT4AD) 2003: This policy aims to stimulate, promote and encourage innovation within the ICT sector and promote growth within the industry.(9)

Financial Environment

Financial incentives: Capital allowances are granted on depreciable assets such as computers and data handling equipment together with peripheral devices.(34)

Fiscal incentives: Tax losses can be carried forward for 5 years for priority sectors, including ICT.(33)

Regulatory Environment

The National Communications Authority Act, 2008 (Act 769): This Act establishes the National Communications Authority (NCA) as the central body to license and regulate communications activities and services in the country. Registration with the NCA will be required for businesses importing telecommunications equipment, including servers, cellular phones, fax machines, cordless phones or radio equipment.(17)

The Electronic Communications Act of Ghana, 2008 (Act 775) and Electronic Communications Amendment Act, 2009 (Act 786): These Acts provide the regulations for electronic communication including licensing and frequency authorization.(18), (19)

The National Information Technology Agency, 2008 (Act 771): This Act establishes an agency to regulate Ghana's ICT sector in Ghana. (20)

The Communications Service Tax Act, 2008 (Act 754) and Communications Service Tax (Amendment) Act, 2019 (Act 998): These Acts impose a communications service tax (CST), which is payable by users of electronic communication services provided by entities authorized under the Electronic Communications Act, 2008 (Act 775). Consequently, companies engaged in providing electronic communications service, as defined by the Communications Service Tax Act, 2008 (Act 754), must now charge CST of 5%.(21), (22)

The Ministry of Communications promotes Ghana's transition into a knowledge-based society and a smart economy through ICT.(23) The National Communications Authority ensures fair competition, and grants licenses and authorizations for operating communication systems.(24)

Private Sector

Huawei RuralStar, MTN Ghana, K-NET, Ecobands Enterprise, Broadband Home Ltd, American Tower Company (ATC) Ghana, Eaton Towers Ghana Ltd

Government

Ministry of Communication (MOC), National Communications Authority (NCA), National Information Technology Agency (NITA), Ghana's Council for Scientific and Industrial Research (CRIS)

Multilaterals

World Bank, International Monetary Fund (IMF), European Investment Bank (EIB), African Development Bank (AfDB)

Public-Private Partnership

Ghana Investment Fund for Electronic Communications (GIFEC), Internet Society (IS), Soronko Academy, Alliance for Affordable Internet (A4AI)