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EDITIONS

Change
to UK

Monday, 6
January, 2003, 17:45 GMT

Ghana battles with Telekom
Malaysia

Ghana Telecom was privatised in
1997

The authorities in Ghana are locked in a bitter
dispute with Telekom Malaysia (TM), which promised to modernise and
improve the African country's crumbling telephone network.

Telekom Malaysia poured millions of dollars into Ghana Telecom after it
was privatised and tripled the number of Ghana's telephone lines.

But a currency devaluation and a change of government in Ghana means
that TM is now facing losses of $100m (£62m).

The end result is that TM has sued the Ghanaian government, with the
case now awaiting international arbitration.

Changing politics

TM paid $38m for a 30% stake in Ghana Telecom when it was privatised in
1997.

As part of the deal, TM was awarded the management of the company and
promised to install 40,000 landlines by 2002.

At the beginning of 2000, TM then paid up half of a pledged $100m to
purchase a further 15% stake in the African company.

But that same year, TM's management of Ghana Telecom became a thorny
issue in the election.

And, when president John Kufuor came to power, he showed a new
hostility to TM.

TM is now demanding back its latest investment, and insists there is
still hope of reaching an amicable agreement.

Rising losses

TM also lost out because of a steep devaluation in the Ghanaian cedi in
the late 1990s.

The Malaysian firm was forced to buy expensive telecoms equipment in US
dollars, but reaped its revenues in cedis.

2000 was also the year of a wider telecoms crash, squeezing TM's
finances further still.

WATCH/LISTEN

ON THIS
STORY

The BBC's Jonathan Kent
"Ghana Telecom became an issue in the 2000
election."

See also:

02 Oct
02 | Technology

Africans
embrace mobiles and the net

19 Apr
02 | Business

Ericsson
positive on Africa potential

27 Nov
02 | Business

Nigeria
mobile boom boosts MTN

07 Nov
02 | Business

Drug
dealing hits Ghana's yam exports

17 Sep
02 | Business

Ghana
battles with cocoa smugglers

Internet links:

Ghana
Telecom

Malaysia
Telekom

The BBC is not responsible for
the content of external internet sites

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