By: Kebba AF Touray
The Performance Report of the National Audit Office (NAO) has unveiled the challenges faced by GAMTEL.
According to the report, as of February 2023, State Owned Enterprises (SOEs) owe the Gambia Telecommunication Company Limited (GAMTEL), Forty-Five Million Dalasi (D45M). The NAO report explained that a review into the arrears owed to GAMTEL by MDAs and SOEs, along with discussions with GAMTEL management, unveiled that as of February 2023, GAMTEL held receivables accumulated from 2015 to 2020, amounting to one hundred and fifty-two million dalasi (D152M), adding that there were outstanding amounts from SOEs, summing up to one hundred and ninety-seven million (D197M) provided by GAMTEL in both voice and internet services.
According to the report, NAO noted that the company does not have a credit threshold, indicating that customers particularly public institutions continue to utilize GAMTEL’s services without paying for them.
The report also stated that at the time of the audit, GAMTEL had no statutory debt recovery strategy to ensure that the debts were efficiently and effectively recovered.
“We observed significant dilapidation and management deficiencies in GAMTEL’s sites across the country. We encountered leaking roofs in areas where expensive telecommunication devices are housed, as well as inadequate ventilation for such equipment,” indicated the NAO Report.
The report unraveled that many of these rooms containing essential and sensitive equipment were excessively humid, with non-functional air conditioning systems.
The NAO Report revealed that additionally, the security of these sites was compromised, as some visited sites had faulty gates, doors, and broken windows, leaving them vulnerable to intrusion by both animals and humans. The report underscored that despite housing critical equipment essential for GAMTEL’s operations, these sites appeared neglected and lacked proper maintenance, with “many of the facilities constructed since the 1980s and had not undergone regular adjustments or upkeep.”
In light of the foregoing, the NAO report made conclusions and among them, is the inadequate supply of broadband connectivity, which inadequacy, according to the report, GAMTEL has not kept pace with the increasing demand for fiber network services across various regions.
As highlighted by the NAO report, this has hindered the revenue potential of GAMTEL primarily due to infrastructure and connectivity accessory limitations.
Another conclusion made by the audit report is the delay in responding to customer service interruptions/faults, decrying that “GAMTEL does not maintain a standard faulty restoration system and hence, unable to efficiently and effectively manage faults reported by customers.”
The NAO report went on to state that this has resulted in customers leaving the company to join other service providers in the telecom industry, affecting not only the revenue generation of the company but also diminishing the goodwill of GAMTEL.
Another conclusion made by the NAO report was on the ineffective monitoring of GAMTEL branches and exchange sites, pointing out that regional managers lack a written monitoring schedule which leads to some areas being unmonitored for years due to the absence of dedicated regional managers.
“Many branches and exchange sites lack basic amenities such as air conditioning, toilet facilities, and proper infrastructure, with 76% of sites facing perimeter fence challenges and exacerbating security concerns,” the report said.
The NAO report further indicated that the audit report recommended that GAMTEL urgently needs to expand its network coverage to meet the growing demand, especially considering that internet packages are its primary revenue source.
On inadequate debt management infrastructure, the NAO report recommended that GAMTEL in coordination with its line Ministry and the Ministry of Finance and Economic Affairs (SOE Commission), must prioritize the recovery of outstanding debts owed by public institutions, and should operate as a standard business entity, and ensure fair compensation for services rendered rather than solely providing public service without payment.
On the ineffective monitoring of GAMTEL branches and exchange sites, the NAO report said GAMTEL should prioritize establishing monitoring schedules for regional managers to ensure efficient service delivery and enhance operational oversight across all villages and towns. It further recommended that regional managers should work with GAMTEL management to address the lack of basic amenities in branches, and should complete perimeter fences to enhance security and prevent unauthorized access.
Similarly, the 2024 Audit Performance Report on GAMTEL showed that liberalization has inflicted a D92 million loss in the Company’s interconnection revenue. The report further explained that after a review of GAMTEL’s audited financial statement, they observed that the Company incurred losses from 2019 to 2022, pending the 2022 financial statement which is still in draft stage.
The report said these losses were attributed to the effects of the liberalization of the voice gateway and the capitalization of the National Broadband Network (NBN) project in 2021, as per GAMTEL’s commercial strategy plan for 2023, and the discussions with management.
“The impact of liberalization began in the latter part of 2019, resulting in a D92 million drop in interconnection revenue for GAMTEL that year, leading to a loss of D172 million. In 2020, the full effect of the new liberalized conditions was felt, when GAMTEL recorded a historic loss of D420 million,’’ the NAO report stated, adding that the significant loss was mainly due to substantial declines in international and interconnection revenue which together constituted 78% of GAMTEL’s total revenue.
Furthermore, the report added that the commercialization and capitalization of the National Broadband Network in 2019, led to a surge in depreciation, rising from D78 million in 2018 to D254 million in 2019, further impacting the company’s profitability. The report, however, disclosed that despite experiencing losses, GAMTEL managed to sustain its operations through company reserves, although these reserves have begun to decline according to available data. The report said GAMTEL is a state-owned, limited liability Company with the Gambia government owning 99% of its shares and the Gambia Ports Authority (GPA) owning 1%.
According to the report, GAMTEL was incorporated under the Companies Act 1955 as amended under Cap. 95. 02 of the Laws of the Gambia 1990, to provide efficient, accessible, and affordable telecommunications and related services in the country.
On the issue of inadequate supply of broadband connectivity, the NAO report detailed that to address these capacity challenges, GAMTEL in collaboration with the government of the Gambia undertook or invested in two significant projects aimed at expanding connectivity. It added these projects are the Ecowas Wide Area Network (ECOWAN) in 2015 and the National Broadband Network (NBN) in 2017. However, the audit report noted that these two projects were inadequate to broadly connect GAMTEL’s customers leaving a very significant percentage of potential customers unconnected. The report asserted that from the interviews with regional managers, it was noted that Fiber Access Terminals (FATs) should be 350 meters (seven spans) away from residential areas for customers to have access.
Furthermore, the report highlighted that discussions with regional managers revealed that 90 percent of customers do not have access to a broadband connection and this according to the report, was associated with the poor implementation of the NBN project (a project worth $25,000,000), with fibre access terminals installed in locations that are far from residential areas effectively limiting access.
“We noted that at the initial stage of the National Broadband Network (NBN) project, the FATs were installed without proper consultation with the management and regional managers who knew the locations that would have been ideal and effective,” the NAO report bemoaned.
Additionally, the report showed that management highlighted that GAMTEL is unable to meet the demand for its two core products due to the limitation of infrastructure as well as the required material stock and equipment such as cables, splicing machines, and other accessories necessary for connectivity.
The report indicated NAO’s conclusion that GAMTEL has not kept pace with the increasing demand for fiber network services across various regions, which hindered its revenue potential primarily due to infrastructure and connectivity accessory limitations.
Among others, the NAO report recommended that GAMTEL should establish strategies to expand its network coverage or access in areas under its mandate, to meet the increasing demand.
In their response to the audit queries made by NAO, the Management of GAMTEL replied that ECOWAN aims to address gaps in backhauling from which all mobile network operators, ISPs, Banks, and SMEs are currently connected perfectly, to sell services to customers.
“The NBN project came to address connectivity to retail customers like residences and small businesses with a scope of only 5,000 customers. It is worth noting that during the design stage of the NBN project, GAMTEL management was not duly consulted hence the poor implementation,” Management said in the report.
According to the GAMTEL Management in the report, GAMTEL expanded the NBN network to virgin areas, and where feasible FATs were relocated closer to customers’ reach, to further enhance last mile connectivity, adding that the action taken is for the equipment supplied through the projects to reach their limitations against the surging demand, and that GAMTEL has designed a project to expand, replace and change its business strategy amid increase customer demands.
