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NCA Finally approves partnership between vodafone and surfline

The National Communications Authority (NCA) has approved a white label agreement between Vodafone Ghana and Surfline Communications, allowing Vodafone to run 4G services on Surfline’s 2600MHz spectrum. 

A white label agreement means one party can produce a product or service but the other party can brand and market it.

This is the reason Vodafone was recently able to roll out its branded Smart Surf routers powered by the Surfline spectrum.

At the launch of Smart Surf, Vodafone stated that the service is only available in Accra, Tema and Takoradi. These are the only footprints of Surfline.

As per the agreement, Vodafone buys capacity from Surfline to power the Smart Surf and other products planned for the future.

The two applied for a white label partnership about five years ago, but it was blocked because at the time, the NCA board chair said “there was no regulatory frame for that kind of partnerships.”

Vodafone is a mainstream telecom operator and Surfline is a broadband wireless access (BWA) operator, and the terms of their respective licenses were different, so a partnership was difficult, from the regulatory point of view.

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For one, Surfline’s license require at least 70 per cent local ownership, while per Vodafone’s ownership structure, 70 per cent of the company is in foreign hands.

Again, at the time of the partnership request, Vodafone was not a player in the 4G space because it was unable to buy any of the 2x10MHz lot in the 800MHz spectrum band auctioned in 2015 for a whopping US$67.5 million.

Market leader MTN Ghana was the only telco that was able to buy the 4G spectrum at that price, and they raised concerns that Vodafone’s proposed partnership with Surfline was an attempt by the telco to enter the 4G market via the backdoor.

While MTN agreed that the 800MHz spectrum was too expensive, at the time, it argued that allowing any mainstream telco into the 4G space via a relatively far less expensive channel, was not going to be fair to MTN.

Somewhere 2018-2019, MTN also fully acquired a 2x15MHz lot in the 2600MHz spectrum band from another BWA operator, Goldkey, enabling it to even extend its 4G footprints further, while all the other telcos remained completely out of that space.

Again, MTN argued that the only condition under which any other telco should be allowed into the space was for them to either acquire their own license or fully acquire spectrum from any of the BWAs, and not a mere partnership.

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But eventually, NCA opened up another auction in the 800MHz spectrum band, excluding MTN from the auction; and Vodafone emerged a winner of one 2x5MHz lot in that band for a stated US$30 million, which is far below the capacity MTN has, but enabled Vodafone to enter the 4G space.

With this new partnership with Surfline, Vodafone now has, in addition to its 2x5MHz in the 800MHz band, access to an extra 2x15MHz in the 2600MHz spectrum band to roll out more 4G LTE products and services.

Vodafone still remains 70% foreign and Surfline still remain 100% locally owned. The arrangement between them is not a complete acquisition; it only allows Vodafone to purchase capacity from Surfline to rollout out Vodafone branded products and services.

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