Hubtel, a leading payment services provider has announced the completion of commercial agreements with the Electricity Company of Ghana (ECG), the country's biggest power distributor. The partnership according to a statement issued by Hubtel, has transformed ECG's operations and increased revenue collection significantly.
Hubtel’s
relationship with ECG goes back to 2007, when the company, then operating as
SMSGH, deployed ECG’s very first APIs for accessing postpaid bills and sending
SMS alerts. In 2011, the company also managed the nationwide deployment and
rollout of ECG’s first-ever Point-of-Sale devices to collect payment. Having
received the first license from the Bank of Ghana to operate as an Enhanced Payment
Services Provider, Hubtel approached ECG in May of 2022 with unsolicited
proposals to offer its billing and payment technology to solve ECG’s numerous
commercial challenges. By July 2022, an aggressive digital transformation plan
was launched by the Board of Directors of ECG, which included a
proof-of-concept agreement for Hubtel to implement its proposed solutions at no
upfront cost to ECG.
In
fulfilment of the requirements of the proof-of-concept, Hubtel re-designed,
developed, and implemented a complete overhaul of ECG’s commercial systems and
payment frameworks and also took over the responsibility for processing and
securing payments for bills, electricity meter credits, vendor quota purchases,
and non-energy invoices. Hubtel also collaborated with other major
technology service providers and relevant departments within ECG to complete
the overhaul of ECG’s commercial systems and empower the company’s staff to
support revenue collection and growth.
Before
Hubtel’s involvement, ECG faced significant financial and commercial
challenges. Hubtel released an accompanying presentation outlining these
challenges and the plans it has implemented to resolve them permanently.
Since the full launch of the new
commercial systems in March 2023, ECG has seen the biggest jumps in its
revenues and customer satisfaction ratings.
Speaking on
the news, Alex Bram, CEO of Hubtel, expressed pride in the company’s
contribution to ECG’s digital transformation journey, stating, “I am proud that our billing and payment
technology has proved to be exceptionally useful to ECG’s digital
transformation plans. As you know, ECG is such a vast organization with very
big legacy problems. So, when the Board of ECG accepted our unsolicited
proposals to transform its commercial operations, we knew we had to bring the
very best of our experience and technology. And I’m happy we have delivered on
time and within the budget limits set by the Board.”
He further
added, “Beyond the successes we have
already chalked up on this project, I’m excited about our ability to use
artificial intelligence and machine learning to monitor consumption and
payments of all customers to detect illegal connections, abnormal behaviour,
and tampered or faulty meters. This is not only introducing a new regime for
protecting ECG’s revenues but also helping boost the company’s financial
performance and strengthen Ghana’s economy.”
In a note,
the Head of Infrastructure at Hubtel, Francis Wilson wrote that “We have tremendously reduced the frequent
downtimes, erratic service failure, and poor network performance that was
affecting both prepaid and postpaid metering systems. Through the
implementation of real-time monitoring tools and a dedicated, proactive
monitoring team available 24/7 to oversee transactions, infrastructure,
applications, metering systems, and networks, ECG’s metering systems now
achieve uptime levels consistently surpassing 99% for many days, leading to
improved service quality and customer satisfaction, ultimately driving revenue
growth.”
In an
interview, Patrick Asare-Frimpong, Head of Products at Hubtel, emphasized the
need to keep in mind the sole objective of constant innovation to drive revenue
growth for ECG as demanded by the Board and management of ECG. “This partnership empowers both ECG and
its customers to foster a more efficient service delivery. Hubtel’s teams have
played a key role in developing several new products and systems, such as the
ECG PowerApp mobile application, ECG PowerApp web application, third-party
vending systems, bank & fintech integration tools, staff portal, backend
portals, real-time revenue monitoring and assurance systems, and an all-new
OperationZero App to tackle power theft specifically. The most important
requirement here is to keep improving these systems until ECG becomes strongly
profitable.”
Commenting
about the cost of the project and the recurring operating costs of the new
systems, Cornelis Rouloph Otoo, Hubtel’s Head of Corporate and Legal Affairs,
explained that “While the project is still ongoing, Hubtel’s work with all the
other consultants and third-party service providers have not exceeded the
US$25m limit we committed to. So far, US$ 12m of this has been accessed to pay
for software license fees, database license fees, cloud infrastructure fees,
service support, and engineering man-hours. For these systems, ECG has demanded
to own all licenses and intellectual property comprehensively.”
On the
recurring costs of the project, he added that, “As we do with our standard agreements
with merchants and retailers using Hubtel’s platform, we charge a fee of 1.95%
on all transactions processed through the platform. 1% of this 1.95% is
typically retained by the mobile money and card scheme providers, and Hubtel
receives 0.95% as our fees. In the case of ECG and the complexities of its
settlement requirements, we passed on all fees retained by the upstream mobile
money & card, settlement, and banking service providers directly to ECG so
that we can maintain our fee of 0.95%. Thus, for clarity, Hubtel’s recurring
fee for managing ECG’s new commercial systems is 0.95% – the same as we receive
from every business that uses Hubtel’s platform.”
Mr. Otoo went
on to say that “the current payment
processing, settlement, and transfer arrangements place significant
responsibilities on Hubtel to ensure operational excellence at all times, and
we have since November 2022 fulfilled this obligation without any
glitch.”
By: Nana Appiah Acquaye