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2007 BotswanaTelecommunications

Sector Performance Reviewaa ssuuppppllyy ssiiddee aannaallyyssiiss ooff ppoolliiccyy oouuttccoommeess

S E M SEBUSANG

M P MAKEPE

T D BOTLHOLE

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botswana country profile alt 1.qxp 2007/12/06 10:44 AM Page 1

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2007 Botswana

Telecommunications Sector Performance Review

a supply side analysis of policy outcomes

Sebusang, SEM, Makepe, MP and Botlhole, TD

University of Botswana

03.botswana.qxp 2008/03/28 11:19 AM Page 1

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2 2007 Telecommunications Sector Performance Review

SERIES EDITOR:

Alison Gillwald

Other country studies in this series are available on

www.researchICTafrica.com.

Proof reading: Beki Nkala

This research is made possible by the support of the Independent Development Research

Centre, (IDRC), Ottawa, Canada.

Senior Programme Manager:

Heloise Emdon, [email protected]

South Africa

For further information contact the RIA! coordinator Beki Nkala on

[email protected] or go to www.researchICTafrica.net

! Benin: Augustin Chabossou

! Burkina Faso: Pam Zahonogo

! Cameroon: Olivier Nana Nzèpa and Robertine Tankeu

! Côte d'Ivoire: Arsene Kouadio

! Ethiopia: Lishan Adam

! Ghana: Godfred Frempong

! Kenya: Tim Waema

! Mozambique: Americo Muchanga and Francisco Mabila

! Namibia: Christoph Stork and Mariama Deen-Swarray

! Nigeria: Ike Mowete

! Rwanda: Albert Nsengiyumva and Annet B Baingana

! South Africa: Steve Esselaar and Alison Gillwald

! Tanzania: Ray Mfungayma and Haji Semboja

! Uganda: FF Tusubira, Irene Kaggwa-Sewankambo, Apolo

Kyeyune, Ali Ndiwalana, Annrita Ssemboga

! Zambia: Sikaaba Malavu


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32007 Telecommunications Sector Performance Review

RESEARCH ICT AFRICA!(www.researchICTafrica.net)

Research ICT Africa! (RIA!) fills a strategic gap gap in the development

of a sustainable information society and network economy by building the ICT policy and regulatory

research capacity needed to inform effective ICT governance in Africa.

The establishment of the Research ICT Africa! network emanates from the growing demand for data and

analysis necessary for appropriate but visionary policy required to catapult the continent into the infor-

mation age. Through network development RIA! has started to build an African knowledge base in sup-

port of ICT policy and regulatory design processes, and to monitoring and review policy and regulatory

developments on the continent.

The research, arising from a public interest agenda, is made available in the public domain and individ-

uals and entities from the public and private sector and civil society are encouraged to use it for teach-

ing, further research or to enable them to participate more effectively in national, regional and global ICT

policy formulation and governance.

RIA! seeks to extend its activities through national, regional, continental and global partnerships. It is

part of the research and training collaborative LIRNE (www.lirne.net) and peers with other networks in

the South, specifically LIRNEasia (www.lirneasia.net) and DIRSI (www.dirsi.net) in Latin America.

The network currently consists of nodal members from 17 African institutions:

Benin – CEFRED, Université d'Abomey Calavi

Botswana – University of Botswana

Burkina Faso – CEDRES, University of Ouagadougou

Cameroon – University of Yaounde II

Côte d'Ivoire – CIRES, l'Université Nationale de Côte d'Ivoire

Ethiopia – University of Addis Ababa

Ghana – STEPRI of CSIR

Kenya – University of Nairobi

Mozambique – Universidade Eduardo Mondlane

Namibia – Namibia Economic and Policy Research Unit

Nigeria – University of Lagos

Rwanda – KIST (Kigali Institute of Science, Technology and Management

Senegal – CRES

South Africa – LINK Centre, University of Witwatersrand

Tanzania – Tanzania Communications Regulatory Authority

Uganda – University of Makerere

Zambia – University of Zambia

East Africa Regional Manager: Dr Lishan Adam

West Africa Regional Manager: Dr Olivier Nana Nzépa


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TABLE OF CONTENTS

Executive Summary 7

Policy and Regulatory Frameworks 11

Market Structure 15

Sector Performance 17

Telecom Regulatory Environment Assessment 24

Telecom Sector Reform and Regulatory Challenges 27

Conclusion and Recommendations 34

References 36


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Introduction

Botswana has come a long way from one of the poorest nations at inde-

pendence in 1966 to a middle income country. This phenomenal growth

has resulted in the country recording some of the most impressive fig-

ures in most economic factors such as GDP per capita for 2006 of US$10

505 PPP, way ahead of most economies in Africa (see Table 3.1). However

to sustain this impressive performance requires that the country contin-

ues trailblazing in newer sectors such as information and communica-

tions technology (ICTs), where as shown in Table 3.1, it has not achieved

its goals, apart perhaps from access to mobile telephony.

TABLE 1. BOTSWANA KEY ICT INDICATORS AT A GLANCE

Attribute Indicator

Population1

1 719 996

Surface km2

600 370

Population density per km2

2.86

GDP (m) (current prices ) Pula (US$ based on exchange rate)1

P57 137.4

(US$9 439)

GDP per capita (US$ PPP)/Pula1

(US$1 0505)/P31 937

Mobile operators 2

Fixed-line Operators 1

No of International Voice Gateway Llicences 1

No of International Data Gateway Llicences 13

Mobile Subscribers (July 2006)2

905 721

Number of fixed lines (March 2006)3

132 034

Fixed Teledensity (%)(March 2006) 7.68

Mobile Teledensity (%) (July 2006) 52.66

Mobile per km2

(July 2006) 1.51

Fixed lines per km2

(March 2006) 0.22

Fastest mobile Internet access GPRS

BotswanaExecutive Summary


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Number of Internet dial-up customers4

8 000

Internet subscriber penetration (estimate from above) % 0.5

Number of Internet users5

45,000

Internet user penetration (%) 2.6

Fastest broadband access (BTC ADSL 768: 768 KBps download and 256 KBps

upload) monthly subscription fee (excluding equipment rental P385.00

Source: 1 Central Statistics Office (CSO) (Stats Update December 2006)

2 Botswana Telecommunications Authority (BTA)

3 Botswana Telecommunications Corporation (BTC)

4 Botswana Internet Service Providers Association (BISPA)

5 Intelecon estimate (2006)

The dramatic developments in the telecommunications sector in

Botswana in 2006, which saw the lifting of the embargo on VoIP, the allow-

ing of self-provisioning by mobile operators and the envisaged service-

neutral licence regime for operators, are the culmination of more than a

decade of reform. This reform has been hailed as a successful model

(ITU 2001, 2003). In this review, we document how the reform process

has been undertaken, particularly with a view to assessing whether per-

formance in the sector is leading to the achievement of the three princi-

pal goals of the telecommunication reform process, namely, the attain-

ment of universal service, efficient services and the achievement of

regional balance within the country (Telecommunications Policy for

Botswana, 1995).

The objectives of the review are first, to provide a description of the reforms

that were carried out. Second, to examine the structure, conduct and per-

formance of the telecommunications sector in Botswana before and after

liberalisation. Finally, the paper establishes and documents the benefits

that have arisen from the reforms, identifies any shortcomings and poses

what it considers to be future policy and regulatory challenges.

When it was established, the telecommunications sector in Botswana

was a monopoly with the Botswana Telecommunications Corporation

(BTC) undertaking joint regulatory, operations and policy functions for

all communications services in the nation. In 1995 the sector was signif-

icantly reformed via a new telecommunications policy, following studies

commissioned as a result of two 1992 presidential directives on (1) Com-

petition in the Provision of Telecommunications and (2) Appropriate

Ownership for Mobile Telephones in Botswana. This enabled the initial

liberalisation process to start in earnest with the founding of the

telecommunications regulator in 1996, followed by the licensing of two

private operators for cellular telephony and a few others in non-core

services markets. The market remained structured around BTC, the ver-

tically integrated incumbent, with BTC maintaining responsibility for

infrastructure provision until recently.


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A decade after the liberalisation process began as a direct consequence

of the stream of reform measures that were introduced, a relatively

vibrant and competitive market exists in the industry coupled with a

remarkable improvement in services, making the sector one where suc-

cessful results can be documented. In addition, an active regulator, the

Botswana Telecommunication Authority (BTA), is also in place and con-

tinues to arbitrate in disputes between service providers.

OVERVIEW OF THE PRE-REFORM SITUATIONBotswana has a reasonably well-developed telecommunications system.

Prior to 1996, the parastatal, Botswana Telecommunications Corpora-

tion (BTC) held a monopoly of provision of services. Internet use in the

country was and is still very limited, mainly because there is no formal

national Internet exchange point. Users of the Internet incur substantial

local telephone charges, which have increased with the recent tariff

rebalancing exercise (BTC Annual Report 2005).

FACTORS THAT DROVE THE REFORM INITIATIVETelecommunications reform in Botswana rests on the realisation of the

important role the telecommunications industry can play in the attain-

ment of Botswana’s development goals. In this era of globalisation the

inability to access modern, reliable and cost effective communications

and data processing makes it impossible for any firm to become inte-

grated into global production and supply chains. Telecommunications

are also essential for trade facilitation, e-commerce solutions, and play

an enabling role in the overall growth of an economy. For Botswana,

upgrading the telecommunications infrastructure was vital for the

achievement of its diversification goals such as the growth of the Inter-

national Financial Services Centre.

Telecommunications can also help address broader economic develop-

ment goals. By bringing communities together, local ideas gain momen-

tum. Medical information can be shared more easily to tackle emergen-

cies. Educational tools can link universities and primary schools across

continents. Governments can easily communicate best practices and

share ideas. Small businesses can access new tools to reduce the costs

of doing business and link to international markets at a fraction of the

cost. The enabling role of telecommunications is limitless with applica-

tions in nearly all economic sectors including agriculture, education,

health, tourism and even manufacturing.

In this light, the Telecommunications Policy of 1995 linked the develop-

ment of the telecommunications industry with government’s overall

development policies through its advocacy of three interrelated objectives

for the sector, namely: universal service, efficient services and regional

balance. Universal access refers to a telephone in every household want-

ing the service at an affordable price. In many countries access to basic


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telephony is considered a basic right along the same lines as access to

basic primary education and primary health care. In Botswana with 7.9

telephone lines per 100 inhabitants (BTA, BTC Annual Reports 2005), we

still have a long way to go to achieve universal service. The need for effi-

cient services stems from the fact that former and current drivers of eco-

nomic growth are weakening and need to be supplemented and replaced

by new and dynamic ones. This, coupled with the governments goal of eco-

nomic diversification, means that whatever direction is chosen it will be

dependent on a broad, reliable and efficient supply of telecommunication

services in the country. The third goal arose because of the tendency for

economic development to be considerably imbalanced in the country both

from a regional perspective as well as from the differences seen between

urban area development and rural area development.

Section two of this report provides the policy and regulatory environ-

ment. Section three presents the telecommunications market structure.

Section four maps out the sector’s performance over the last ten years

since the reform process began. Section five explores the telecommuni-

cations sector reforms and regulatory challenges that must be met. Sec-

tion six presents the conclusions and recommendations of the report.


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Policy and Regulatory Environment

POLICY FRAMEWORKIn parallel with the telecommunications regulation, other policies sup-

portive of the reform process were put in place, in 1996 and early

2000’s. An overarching science and technology (S&T) policy1

was

adopted in 1998. The policy gives priority to strengthening telecommu-

nications infrastructure and the use of ICTs, and attracting women to

professions and careers in the field of science and technology. It pro-

poses an umbrella under which S&T development in the country can

be undertaken.

INTELLECTUAL PROPERTY RIGHTS (IPR)2

:

Botswana has IPR legislation that is in accordance with the WTO Agree-

ment on Trade Related Aspects of Intellectual Property Rights (TRIPS).

The legislation comprises the Copyright Act of March 2000, The Patent

and Trademark Act, and the Industrial Property Act of 1997 and its

implementing legislation in late 1998. Thus regulatory reform in the

telecommunications sector takes place in an environment that is largely

supportive of the process. However, Botswana is still to put in place an

effective competition policy to deal with any anti-competitive tendencies

of the dominant operators.

INSTITUTIONAL ARRANGEMENTSSince the telecommunications market’s partial liberalisation in 1996, the

regulator, the Botswana Telecommunication Authority (BTA) has

licensed operators and presided over disputes in the sector between

incumbent telecommunications operator (BTC) and the two cellular

companies and other value added service providers. The freedom that

the BTA enjoyed in policy implementation and liberalisation pacing,

allowed it to gradually and deliberately open up the market to further

competition and through its clear dispute-handling mechanisms allowed

investors’ confidence in regulatory oversight, allowing for further stud-

ies and recommendations for further liberalisation, pricing and many

other aspects that have allowed the government from mid-2006 to open

up the market further by allowing voice over IP (VoIP), unrestricted

international voice gateway licensing and the ushering in of technology

neutral licences for the current operators.3

While this move by govern-

ment was well advised and timely, it has not addressed the negativity

introduced in December 2004 when government amended the Telecom-

munications Act to make government not only the policy maker but also

the policy implementer (regulator) by placing decision-making powers

for the issuance of licences and conditions for the granting of those

licences, back with the Minister of Communications Science and Tech-

nology (Amended Telecommunications Act 2004).

1Science and technology policy (1998)

2This is an abridged version of the treatment in the UNDP Botswana Human Development report of

2005

3Hopefully to be operationalised in the first half of 2007


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Thus the separation of policy formation (government), regulation/policy

implementation (the regulator) and operation (the operators) has been

changed, with the result that while the BTA seemingly retains the title of

regulator and has for all intents and purposes continued to operate as

policy implementer for government, this is not guaranteed for the future,

since it possibly emanates from the rapport the erstwhile chief executive

officer had with the minister, in what Sebusang et al (2005) called the

benevolence of the current minister of Communications, Science and

Technology. Until the privatisation of the government-owned BTC goes

ahead (in 2007 if the intention of government materialises) the govern-

ment through its ownership of the fixed-line operator is not just policy

maker and regulator in one, it is also the major operator, a situation that

has the potential of undermining the otherwise levelling telecommunica-

tions field so far. The real rub will come should BTC launch a cellular

operator arm with only the new service-neutral licensing regime

allowed, and the two other cellular operators detect any bias in the pro-

vision of services by the BTC to all the players.

COMPETITION ISSUESThe Botswana communications sector has not fully embraced the value

attached to freedom of choice for users of mobile services. Whilst the

recent policy shift by government allows service providers to choose the

platform to use in the provision of services, including contracting with

the hitherto only legal carrier for international voice traffic, the BTC, as

well as own provisioning, the regulator and the Minister have not as yet

agreed that users of mobile services be allowed to keep their numbers

when they switch service providers. This means that if users are

unhappy with their current service provider they cannot change to an

alternative service as this will be too costly. The cost of switching

requires that they buy a new start-up kit from the second provider,

thereby losing their current number. The net result of this is that compe-

tition has been stifled, as the two mobile operators do not feel the neces-

sity to provide superior service in order to attract disgruntled users from

the competition. It must, however, be acknowledged that in global terms

the cost of switching, provided one possesses an “open” phone, has

become relatively modest, costing as little as P15.00 for a pre-paid start-

up kit, which is less than US$3.00 at current exchange rates. Thus the

major disincentive to switching then becomes the burden of informing

contacts of the new number.

NEW POLICY DEVELOPMENTSA significant development in the communications sector in Botswana

was the announcement in June 2006 by the Minister of Communications,

Science and Technology that further liberalisation was to take place.

This required BTC to re-balance its tariffs – a process that was started

in 2005, resulting in increases for local calls whilst international call

charges saw a drop. The consultancy report by Ovum (2005) recom-


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mended other far-reaching policy interventions such as moving away

from infrastructure-based competition to a licensing regime that is tech-

nology neutral, terminating BTC’s monopoly on international voice gate-

way licence, and many others under consideration by government until

June 21 2006, when they were all introduced.

A more liberalised environment was ushered in from that date, when the

Minister announced government’s decision on further liberalisation. On

01 August 2006, VoIP was legalised, allowing ISPs to offer voice teleph-

ony over the Internet. In addition, 1 August heralded the lifting of the

restriction on self-provision of transmission links by the two mobile

phone operators, making them further independent of BTC (should they

so choose) in their backbone infrastructure. The biggest change on the

horizon is the decision to allow the three operators, Mascom, Orange and

BTC the ability to operate under service-neutral licences as from 01 Sep-

tember4

. This means the three can offer both mobile and fixed-line

telephony under the same licence. The incumbent operator, BTC, is

already reported to have applied for this licence well ahead of schedule,

even before the regulator can put in place regulations relating to the

changed environment. With the desire to have a mobile presence, it is a

given that Botswana will have three mobile operators with national cov-

erage by the end of 2007, as well as the possibility of regional mobile

operators should one of four envisaged rural/regional licensee operators

(as from September 1, 2006) choose the mobile route as their service.

According to the liberalisation programme, on 01 October BTC will lose

its monopoly on international voice gateway, followed by fully balanced

tariffs by BTC in December 2007. This will then usher in (should the mar-

ket so indicate prospects for new entrants) national service-neutral

licences in December 2009.

Two other significant developments have taken place in the regulatory

environment: first the adoption of a formative policy on Information and

Communication Technology policy known as Maitlamo (www.mait-

lamo.gov.bw), that will position Botswana as an ICT hub for the SADC

region. Secondly, the intention to open up the national broadcasting

landscape with the advertisement of three national licences was adver-

tised in national newspapers in May 2006. Whereas Botswana has had

two regional (urban) private radio stations since the late 1990s, it has

never had a national private and commercial radio station. This new

development is thus bound to change the broadcasting environment

quite considerably. What the new draft ICT policy will usher in is a more

broad-based communications regulator (not just telecommunications),

requiring that in future the BTA should transform to a communications

regulator along the lines of ICASA of South Africa, to allow it to regulate

the ICT area as well. The semi-independent telecommunications and

broadcasting boards should be consolidated into a single communica-

tions board.


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Intelecon Research & Consultancy Ltd of Canada have been engaged to

develop the structuring and commencement of Botswana’s Universal

Access and Service Policy (and Fund), and further developments in the

regulatory landscape will follow the process of consultation. This consul-

tancy, together with the drafted rural telecommunications policy (Icegate

Solutions 2006), envisages removing BTC from its obligations to provide

rural telephony connectivity, instead soliciting through competitive ten-

der, providers of rural telecommunications with smart, timed subsidy

from a functional universal access and service fund. The same concept

has been further developed by Intelecon (2006) who recommend that

…the four licence areas5

should be offered for competitive tender on a

smart-subsidy basis. In this increasingly accepted form of UA competi-

tion, operators bid primarily to meet the specified service level obliga-

tions, agreeing to a once-only cash subsidy that will be disbursed over

time as they meet their build and operate obligations. The networks are

owned by the operators unless they default, in which case they would

revert to Government ownership. The winning bidder would be selected

solely on the basis of the lowest subsidy requirement, but subject to

stringent corporate and financial pre-qualification / selection criteria,

and to substantial technical and operational compliance with the service

specifications. The technical specifications would require that the sys-

tems meet internationally recognised standards and local environmen-

tal control standards.

This is a timely change of approach since government has decided to pri-

vatise BTC in a fast-track process, so that by mid-2007 a strategic equity

partner with a holding of at least 40% of its shares would be part of its

make-up.

REGIONAL COOPERATION ON POLICY AND REGULATORYISSUESThe BTA has been an active member of the regional regulator group that

in 1998 formed the Telecommunications Regulators Association of

Southern Africa (TRASA), now Communications Regulators Association

of Southern Africa (CRASA). This process was aided through the USAID

Telecommunication Restructuring Project, and in pursuit of the SADC

Protocol on Transport, Communications and Meteorology, the drafting of

the constitution was delegated to three lawyers from Tanzania, Zambia

and Botswana, the latter being the BTA’s first executive chairman.

Whilst the regional body was hosted by the South African regulator ini-

tially, the BTA has played host to it since October 2000 and only stopped

in early 2006 when CRASA moved into their own offices (BTA 10th

Anniversary Commemorative Brochure 2006). The BTA has thus been

actively engaged in the development of regional model policy and regu-

lation from the very beginning.


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Market Structure

The telecommunications market structure is dominated by three voice

telephony operators; one vertically integrated PSTN operator (BTC)

which until June 2006 provided backbone infrastructure to cellular

phone operators and had the only international voice gateway licence by

policy and regulation. The BTC owns the primary infrastructure and pro-

vides leased lines to ISPs and data service providers, as well as carrying

traffic for the two cellular phone operators Mascom Wireless and Orange

(Botswana). Two of the three dominant operators are Mascom Wireless

and Orange (Botswana) the mobile phone operators who have depended

on BTC for backbone infrastructure. The structure will experience an

evolutionary change after the near-revolutionary June 2006 decision by

government to allow self-provisioning and service-neutral licences for

operators. These are in addition to the unbanning of VoIP and opening

up of the international voice gateway to competition.

There are almost 60 other operators, ISPs, data service providers and

private network telecommunications service providers that complete the

telecommunications landscape in Botswana. In addition to being the pri-

mary infrastructure provider BTC owns an ISP subsidiary (Botsnet)

which is the only ISP in the country with points of presence (POPs) in five

population centres around the country.

MARKET SHARELess than a decade ago, the Botswana telecommunications market was a

monopoly of the BTC, and thus the government corporation controlled

100% of both voice and (to some extent) data market. At the time of the par-

tial liberalisation and the licensing of the two mobile operators in 1998, the

BTC experienced a malfunctioning billing system. The provision of mobile

telephony therefore came about as a relief from the unwieldy and inefficient

monolith, and users readily embraced this new avenue with the result that

by June 2006 the mobile telephony was now more than six and a half times

the number of subscribers than the number of fixed-line subscribers. There

are other service providers for Internet and other value added network

services (VANS), but the dominant players in the market are the three voice

and data entities, BTC, Mascom and Orange (Botswana). Between the two

cellular companies, Mascom is ahead in terms of subscriber base; however

recent trends indicate that the gap between them is narrowing, with the

June 2006 data indicating a gap of less than 20% between them with Mas-

com at 59.7% versus Orange at 40.3%.

The dominant feature of the market for mobile telephony is that the pre-

paid (or pay-as-you-go) form predominates, accounting for more than

97% of all connections. The same scenario, though at a lower rate,

appears in fixed-line telephony where 37% (Intelecon 2006) of all connec-


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tions are pre-paid, with a preponderance in the rural areas (Sebusang et

al 2005). This underlines the clear rural-urban divide in terms of access

to telecommunications services, as well as the ability of households

across urban as well as rural (village) areas to afford such services. The

VANS market, which is an important source of growth in the sector, has

not been quantified in terms of market share. Nevertheless, it is growing

both in size and stature and will begin to challenge the orthodox

providers of voice communication service.

MARKET INVESTMENTInvestments in the telecommunications sector as listed by the Central

Statistics Office (CSO) have not been disaggregated in terms of specific

sub-sectors such as transport, communications, etc; they are instead

reflected as a transport and communications whole. However, looking at

the level of activity in the communications market, and the fact that in

the drawing up of the national ICT policy the amount of investment on

computer equipment was estimated at close to P1 billion (Maitlamo

2005) annually, plus the marked pervasiveness of the mobile phone and

the multiplication of other VANS across the divide, these factors indicate

an enhanced investment in the market.

Taking the available numbers from the fixed-phone operator (BTC) and the

two mobile phone companies as indicative of the levels of investment in the

communications market, this shows an impressive increase relative to a

decade ago, where BTC (and thus government) was the only significant

investor in the sector. For the year ended March 2005, BTC had invested

P167.4 m in their telephone service whilst in the same period the two mobile

operators jointly had assets amounting to P790.7 m, clearly increasing the

value of the investment that has gone into the as yet partially liberalised

market. Factoring in the inputs of the other market operators, some of

which represent substantial market presence as part of global companies,

such as Verizon and the Bytes Technology Group, will show that billions of

pula have been invested in the sector over the past decade.

EMPLOYMENTSimilar to the situation regarding the levels of investment, employment

figures are not complete, since numbers are only certain for the three

major operators, BTC (1 068 in 2005) and 305 (August 2006) for the two

mobile operators. Many other people have been employed as distributors

and retailers of network services, including but not limited to the sale of

airtime. Employees from the many other VANS providers, such as the

more than fifteen Internet service providers (ISPs) and others, have not

been factored in, showing a healthy growth in the sector compared to

1998 when BTC provided the only employment opportunities in the sec-

tor. With the advent of mobile telephony, not only are the cellular

providers providing employment, but individual entrepreneurs running

cellular phone kiosks also add to the employment opportunities.


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Sector Performance

As we have made clear from the outset, the Botswana cellular telephony

market has experienced an exceptional growth over the decade of

increasing liberalisation in the telecommunications sector. As Figure 3.1

shows, this growth occurred against a background of declining access to

figures for fixed-line telephony. Starting at zero in 1998, the mobile phe-

nomenon reached more than 800 000 by March 2006 and currently stands

at well over 900 000, giving a mobile teledensity of well over 50%. Fixed-

line telephony on the other hand, expected to grow towards the 200 000

subscriber mark in 2002, has in fact experienced a slow and continuous

decline towards the 100 000 subscriber mark. Whilst the figure does not

explicitly state the Internet user and accessibility numbers, their num-

bers can be subsumed from those of fixed-line telephony, which is not at

all impressive given the critical relationship between fixed-line access

and Internet penetration.

FIGURE 1: TELECOMMUNICATIONS SECTOR PERFORMANCE 1998-2006


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ACCESS TO ICTS

TABLE 1. ICT PENETRATION IN SADC

Main fixed telephone Internet Mobile cellular

lines per 100 users per 100 telephone subscribers

inhabitants 2004 inhabitants 2004 per 100 inhabitants 2005

(Tanzania – 2004 data)

Mauritius 28.69 14.6 57.29

South Africa 10.27 7.55 71.6

Botswana 7.71 3.39 46.63

Namibia 6.36 3.73 24.37

Swaziland 4.11 3.32 19.36

Zimbabwe 2.67 6.9 5.87

Lesotho 2.07 2.39 13.65

Zambia 0.8 2.01 8.11

Malawi 0.75 0.37 3.33

Angola 0.67 1.22 6.86

Tanzania 0.39 0.89 5.16

Mozambique 0.37 0.73 6.16

Madagascar 0.32 0.5 2.71

Source: ITU Database October 2006Lesotho

As can be seen in Table 1, Botswana has done relatively well in the SADC

region in terms of fixed-line and mobile telephony, two of the three meas-

ures of ICT penetration, ranked third behind Mauritius and South Africa.

In the third category, Internet usage, the country is not at all competitive,

registering only 3.39% and coming in fifth behind not only the two previ-

ously cited leaders, but also behind both Namibia and Zimbabwe. Given

the country’s relatively higher teledensity compared with Namibia and

Zimbabwe, it is something of a lost opportunity that the available

resources (telephone lines) are not being utilised to the full to narrow the

gap between Botswana and leading regional powers, and ultimately for

the country to become globally competitive.

FIXED LINE

Without any private injection of capital, technology or skills, there has

been little fixed-line telephony growth, with figures hovering around the

7.7% to 8% rate. This could also be explained by the fact that BTC, the

incumbent, had a cash cow in the form of international call rates that

bore no relation to cost of provision. So much so that local calls were

effectively being subsidised by international calls that until recently

were the exclusive domain of the BTC. With further liberalisation and the

need for BTC to balance tariffs, meaning the costs of calls must reflect

the cost of provision of service, local call rates have generally increased

whilst international call rates have fallen. In the two years that this has


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happened it cannot be said with any certainty what the likely impact will

be in terms of access. A reasonable assumption can be made, however,

that unless the cost of providing local telephony falls, there will be no

growth of access for the foreseeable future unless enhanced services

that cannot be affordably met by mobile operators, such as broadband,

are offered. ADSL is currently offered to a very limited corporate seg-

ment of the market, in spite of the fact that BTC has expanded the capac-

ity which is currently under-utilised.

MOBILE

Mobile telephony has provided the greatest access to telephony. Starting

in the mid-1990s, access has expanded to the point where on a per capita

basis more than 50% of residents (including minors and the invalid) have

access to a mobile phone or at least a SIM card. The growth in the sec-

tor has not shown any signs of slowing and one can assume that the rel-

atively low cost of connection (in some cases below US$2.50) has driven

most users to acquire SIM cards for the two cellular phone operators,

especially with number portability not yet in sight. The telecommunica-

tions authority (BTA), through the public pronouncements of some of its

senior executives, has not as yet considered it important that number

portability be introduced in the Botswana cellular market. Considering

that up to 25% of cellular phone users would consider switching net-

works (Sebusang et al 2005) if they could keep their current numbers,

the lack of movement on this front has reduced the dynamic growth and

competition that this facility would usher into the marketplace.

BROADBAND

Botswana still lacks real, accessible and affordable broadband, which is

inhibiting Internet growth. While in late 2006 the incumbent operator

BTC widened the area of access to other urban centres, the levels of

uptake of the ADSL service, other than perhaps in the corporate world,

have not been impressive in spite of the infrastructural capability. On the

cellular front, one of the two operators, MASCOM, has offered some high

speed Internet access through GPRS, but bandwidth costs have resulted

in a limited uptake.

INTERNET

This is Botswana’s Achilles heel. Despite conditions for increased usage

and access to the Internet having been improved - such as the more than

70% coverage rate of population centres by copper wires, the introduc-

tion of internet products such as ISDN, frame relay and ADSL for fixed-

line and GPRS (for mobile phones) - the numbers of Internet users have

remained below 3% of the population. This is the result of a self-perpet-

uating cycle of the high cost of dial-up usage, the non-availability of com-

puters and the prohibitive cost of broadband.


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COST OF USAGE OF ICTSTelecommunication prices are relatively modest in Botswana compared

with other African countries, but in particular when compared to the

SADC region and the lower middle-income states in SADC, namely Mau-

ritius, South Africa and Namibia. By comparing Botswana’s costs of

usage against those of both South Africa and Namibia, the following sec-

tion will give an indication of where the country stands in terms of the

economic potential of a heightened exploitation of ICTs and the ushering

in of an information society and economy.

RETAIL

Fixed-line price comparison. Figure 2 compares the cost of bundles of

telecommunication services among the 14 countries, converted to US$ at

nominal exchange rates at the end of 2005. The bundle consisted of the

following services:

! 3 minute local call;

! 3 minute national call;

! 3 minute call to the US

This basket definition is based on the way the ITU collected data and

does not make any explicit assumptions about usage patterns.

FIGURE 2. PRICE COMPARISON FOR FIXED-LINE BUNDLE

Figure 2 clearly shows that Botswana at position five is amongst the

cheapest of the group of 13, with costs slightly less than twice what South

Africa and Nigeria offer as the two least expensive countries. However,

Botswana is still more than four times less expensive than Zambia,

which is the most expensive country for the fixed-line bundle of services.

As will be seen when comparing mobile phone costs, Botswana still out-


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performs Namibia, costing exactly half the comparable service bundle in

the latter country. Whilst taken against the fact that Namibia, as well as

South Africa and Mauritius in the region, should be direct competitors

and thus those against which to benchmark, Botswana is inexpensive.

To remain competitive Botswana must move towards the very top of the

ladder in Africa, such that the costs of services are comparable with

those of South Africa and the other leading nations. One of the supple-

mentary objects of the regulatory policy (in the form of the [draft] ICT

policy) is that Botswana must become a SADC Internet/ICT hub. The

prospect of Botswana becoming a SADC hub depends, amongst others,

on the costs of usage of telecommunication services that are low relative

to its neighbours.

While Figure 2 provided a cost comparison across a number of African

countries in late 2006, the situations in individual countries, Botswana

included, have changed since that study was carried out. The Botswana

fixed-line costs for the period October 2004 to September 2007 (Figure

3.3) (post paid customers, the same trend experienced in all other serv-

ice categories) show the impact of the tariff balancing regime where local

(and to some extent national) calls have seen an increase while interna-

tional call prices have declined quite significantly. In the twelve-month

period starting in October 2006 local and national call rates have

increased while international call rates have decreased.

The cheapest local call (for the metered period of 3 minutes used) has

increased 2.6-fold compared with a decline of 14% for the cheapest

national call. However the biggest fall has been recorded in international

call charges as shown by the 3-minute call to the US which fell by 55% in

the two years. The drop was most dramatic in the first year, where the

cost was halved.

FIGURE 3. COSTS OF FIXED-LINE CALLS 2005-2007


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Considering all that has been previously stated in terms of the lack of

Internet penetration due to the costs involved, the new local tariffs are a

further impediment to making Botswana truly competitive and a natural

hub for Internet traffic in the SADC region.

The unit costs of calling are not the only constraint. Recurring costs

associated with having a post-paid telephone line at home (Figure 3.4),

which have increased by 140%, further erode whatever competitive

advantages the country might have had vis-à-vis regional competitors for

Internet hubbing, and related business opportunities such as business

process outsourcing (BPO) (www.ifsc.co.bw).

FIGURE 4. FIXED-LINE (POST-PAID) INSTALLATION AND MONTHLY SUBSCRIP-

TION CHARGES

Mobile costs. In order to understand the cost basis to be used across a

number of African countries in terms of the costs of usage of ICTs,

ResearchICTAfrica! (RIA!) looked at a bundle for mobile services based

on the following services:

•3 minute off-peak to same network;

•3 minute peak to same network;

•3 minute off-peak to different network;

•3 minute peak to different network;

•3 minute off-peak to fixed-line;

•3 minute peak to fixed-line.

This is a bundle purely based on usage costs, excluding monthly sub-

scriptions or once-off installation fees. This basket definition is based on

the way the ITU collected data and does not make any explicit assump-

tions about usage pattern.


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Of the 13 countries whose data was available, Botswana ranks number

five in terms of cost, at a cost 3.14 times higher than the cheapest coun-

try, Mozambique. When looked at in terms of comparable middle-income

African countries such as Namibia, Mauritius and South Africa, the

usage bundle is the cheapest (compared with South Africa and Namibia

since the Mauritius data was not available), constituting respectively

73% and 64% of the South African and Namibian costs, where Namibia

is in fact the most expensive of the sample. If Botswana is to maintain its

competitiveness, then the costs of communications must come down and

be at least comparable with those among the leading countries, Mozam-

bique, Ethiopia and Ghana, whilst maintaining its cost advantage over

the other middle income countries South Africa and Namibia in SADC.

FIGURE 3.5: MOBILE PREPAID USAGE COSTS IN 2005

Source: Stork & Esselaar 2006.


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Telecom Regulatory EnvironmentAssessment

Figure 6 below shows the results from the review of the telecom regula-

tory environment and is based on perceptions of various stakeholders.

Each dimension is measured on an ascending scale from 1 to 5 where 1

is highly ineffective and 5 is highly effective.

The perceptions related to the regulation of anti-competitive practices

are rated in most cases as high. To ascertain the perceptions about this

measure, individuals were asked about their perceptions with regard to

the regulation of anti-competitive cross–subsidisation, the use of infor-

mation obtained from competitors with anti-competitive results, not

making available to competitors on a timely basis, technical information

about essential facilities and commercially relevant information, exces-

sive prices, price discrimination and predatory low pricing, refusal to

deal, vertical restraints, technical disruption of interconnection, sharing

of towers and facilities by parent company and subsidiaries in different

parts of the market. As can be seen from the diagram, perceptions about

the way anti-competitive behaviour is regulated exceed 3 for mobile fol-

lowed by VANS then fixed telephony. Perceptions related to tariff regula-

tion were also high for fixed, mobile and VANS. Here respondents were

asked questions about whether they thought the regulation of tariffs

charged to consumers was effective. When it came to perceptions about

interconnection and facilities, views on aspects such as ensuring inter-

connection with a major operator at any technically feasible point in the

network, the quality of interconnection compared to own like services

provided, reasonable charges for interconnection rates, unbundling of

interconnection and interconnection being offered without delay, the

sharing of incoming and outgoing IDD revenue and the provision of facil-

ities at the same cost to subsidiaries, respondents rated these highly

achieving a score of 4. However, the low rating for the cost of intercon-

nection links and switch interface, payment for technical disruption of

interconnection and the timely provision of services by providers was

rated low and had the effect of pulling down overall results. Conse-

quently the overall result for this measure was not as effective as for the

other measures on the diagram.

Perceptions about issues of scarce resource allocation were poor for

fixed telephony when compared to mobile and VANS. Individuals were

asked how they felt about the regulatory environment with regard to the

timely, transparent and non-discriminatory access to spectrum alloca-

tion, numbering and rights of way and the frequency of allocation, tele-

phone number allocation and site rights.


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Perceptions regarding the regulatory environment when it came to mar-

ket entry were highly effective when it came to mobile and VANS while

that for fixed telephony was rated lower. Individuals were asked about

the transparency of licensing, whether the applicant knew the terms,

conditions, criteria and length of time needed to reach a decision on their

application; licence conditions and exclusivity issues.

FIGURE6: EFFICIENCY OF REGULATORY ENVIRONMENT

(1 = HIGHLY INEFFECTIVE AND 5 = HIGHLY EFFECTIVE)


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The positive perception of Botswana’s regulatory environment reflected

in international case studies of best practice by the ITU is confirmed in

the relatively good position of Botswana compared to other countries

assessed in a RIA! comparative analysis of the regulatory environment

across several African countries. Botswana is only exceeded by Nigeria,

which has been working to improve its performance across these key

regulatory criteria for introduction of effective competition, while Côte

d’Ivoire is amongst the oldest regulators regarded as established

amongst industry stakeholders. That said, Botswana still fell just below

the aggregation of all the criteria, demonstrating much room for

improvement in a range of key indicators as described above.


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Telecom Sector Reform and Regulatory Challenges

At the outset we indicated that there were three critical areas that the

reform of the telecommunication sector hoped to achieve, namely

(Telecommunication Act 1995):

! Universal Service

Ie a telephone in every household wanting the service, at an afford-

able price.

! Efficient Services

The telecommunications policy should aim to promote a broad, reli-

able and efficient supply of telecommunications services in the coun-

try, to international standards and at the lowest possible cost to con-

sumers and to the national economy.

! Regional Balance

Economic development is taking place unevenly in different regions

of the country and between rural and urban areas. In Botswana, with

the majority of the population living in rural areas, an important chal-

lenge for Government is to integrate these people and areas into the

economic and social development of the nation.

These three areas are underpinned by the envisaged observance of a set

of five principles:

! Introduction of competition in the industry and the abolition of the

monopoly in provision of telecommunications services;

! Encouragement of private interests to assume greater responsibility

for development of the industry;

! A telecommunication industry characterised by transparency in deci-

sion-making and development;

! Promotion of a controlled development of the industry by regulating

supply conditions;

! Promotion of users’ influence in development of the industry.

The following section documents the regulatory reform initiatives over

the past decade, including recent further liberalisation to allow for

answers to the question of whether the particular reform met any of the

three requirements of the sector reform. Additionally, it allows for the

interrogation into the compliance of any measure within the five-pillar

operational objectives of the regulatory environment and against the

perceptions of effective regulation..


6Sentiments of BTC CEO, V T Seretse, at the OVUM Further Liberalisation Stakeholder Conference,

GICC Gaborone 2005. They preferred further liberalisation to follow privatisation on the basis that

any other route would dilute the value of BTC at privatisation. BTC’s and his views have since

changed and they have embraced the twin tracks of further liberalisation and privatisation.

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BOTSWANA TELECOMMUNICATIONS POLICYOPERATIONAL OBJECTIVESCOMPETITION:

The partial liberalisation of the telecommunication regime had, until

recently, resulted in some competition in certain sectors, such as mobile

telephony provision (two operators), internet service provision and other

value added network services. There was no competition, however, for inter-

national voice and transmission links for carrying cellular operator traffic,

which were the monopoly of BTC until the decision of the Botswana govern-

ment in June 2006, to allow their liberalisation with effect from 01 October

and 01 August 2006 respectively (Press Release Ministry of Communica-

tions Science and Technology 2006). This further liberalisation, which also

includes the decision to issue service-neutral licences, is likely to result in

keener competition. Thus the evolution of the regulatory process has

remained true to the objective of competition, if somewhat belated in certain

sectors. The competition for international voice will be further enhanced by

the lifting of the ban on VoIP for data and ISP providers.

PRIVATE SECTOR INVOLVEMENT:

If for no other reason, the liberalisation of the communications sector in

Botswana must have been driven by this consideration since FDI has

been identified as a key parameter in the government’s decades-long

struggle to diversify the economy away from diamonds. The BTA (and

hence the liberalised market) has just celebrated 10 years of existence.

From the very beginning, a focal point in the licensing of operators has

been the attraction of foreign capital and skills (in the form of interna-

tional joint venture partners for citizens in the two cellular phone com-

panies in the form of France Telecommunication (for Vista now Orange

Botswana, and both Econet Wireless and Portugal Telecom International

for Mascom) in 1998. This was followed a year later by the awarding of

two commercial FM broadcasting licences to two consortia that had an

average of 49% foreign holding, further bolstering FDI in the sector (BTA

10th Anniversary Brochure 2006). The ISP and VANS services areas,

where a number of the major operators are subsidiaries of major inter-

national companies such as Bytes Technology Group (ISP) and Verizon

have ensured that the restructuring principle with the private sector

playing a meaningful role has been fulfilled.

REGULATION:

The envisaged implications of this principle may be seen in the textbox

below. As already cited above, the regulatory authority has remained

independent of the incumbent operator through the non-issue of a cellu-

lar service licence. Secondly, by consistent control of anti-competitive

actions (provision of leased lines to ISPs) requiring them to charge based

on costs (tariff rebalancing) and to open up the market (further liberali-

sation) at a time when BTC felt it was not yet ready to face up to that

challenge6

.


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The BTA has on more than one occasion been chosen by the ITU as a

case study – 2001 for effective regulation (ITU 2001) and in 2003 for dis-

pute resolution (ITU 2003). Whether the issue at hand is on dispute res-

olution or on policy formation and adoption, the BTA has gone out of its

way to engage the broadest stakeholder groups to ensure their involve-

ment in the development of regulations. The BTA has dealt with over 170

complaints since 1998, including directing BTC (the incumbent telecom-

munication operator) to provide leased-line capacity to two Internet Ser-

vice Providers (www.bta.org.bw/publications.html ). It has equally ruled

on and set out interconnections and leased line charges for the two cel-

lular operators and the BTC.

6.4 PROMOTION OF A CONTROLLED DEVELOPMENT OF THE

INDUSTRY BY REGULATING SUPPLY CONDITIONS.7

Justification. The fundamental purpose of telecommunication indus-

try regulation is to optimise sector performance by creating an envi-

ronment which is conducive to long term investment and by enforc-

ing effective measures to prevent exploitation. When competition is

introduced it is also necessary to create a “level playing field’’ and

have a referee in the market

Implications. Telecommunications regulation is a complex and

demanding task even where competition already exists and

resources are plentiful. In Botswana, where the monopoly position of

the government-owned operator is well entrenched and where skilled

human resources are in short supply, the task may be daunting. Not

only must the Regulatory Authority cope with the task to physically

establish the organisation, but also within a short period after its

establishment address a host of critical issues from licensing to pric-

ing, interconnection and competition policies. It is envisaged that

technical and financial support for development of the regulatory

capacity and necessary human resources will be needed for a num-

ber of years.

Given the fact that data available for the Regulatory Authority for its

decision making, at least in the beginning, is mainly available from

BTC or the Ministry, it is important that the Authority demonstrates

its independence by developing its own information channels as

quickly as possible. (Sebusang et al)

To achieve desired development of the industry and enable the Reg-

ulatory Authority to carry out its functions, it is imperative that the

Authority’s legal mandate and its routine operations are defined in a

manner which separates it from direct day to-day interference from

either the Ministry or the dominant operator.

An independent and well functioning Regulatory Authority has an

important role to play in pursuit of the national goals.

7Telecommunications Policy for Botswana, December 1995


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Although the regulatory process has not been held captive by the domi-

nant operator, the same cannot be said with regard to the relationship

with the ministry. The ministry, through the Telecommunications

(Amendment) Act of 2004, has now carved for itself some of the regula-

tory roles that had until then (December 2004), resided with the BTA.

Whilst this amendment improved the governance relationships by split-

ting the role of chairman from that of chief executive, it greyed the then

separate regulatory role (the BTA) from that of policy making (the min-

istry). The ministry, not the BTA, now makes regulations, in addition to

the Minister having to approve all decisions made in relation to applica-

tions for fixed-line telephony and cellular telephony licences.

If one were to estimate how the BTA would be viewed with regard to best

practice in regulation, it is doubtful whether it would still appear as a

model regulator where separation exists between policy, regulation and

operation. As Sebusang et al (2005) observed, there exists the danger

that were a less benevolent minister to assume the portfolio of commu-

nications, or perhaps a successor to the current CEO who has less polit-

ical influence, conflict in policy making and regulation could endanger

the so far excellent relationship between government (policy maker) and

the BTA (regulator).

CONSUMER PROTECTION:

By regulating charges in the provision of services, opening up the sector

for competition, and arresting any anti-competitive behaviour of opera-

tors, the regulator has ensured that users play a role in the development

of the sector. As already indicated, users as stakeholders are consulted

on the policy formation process, thus ensuring that policy development

and/or implementation incorporates the concerns and wishes of con-

sumers.

The BTA has been proactive in ushering in policy and practices ensur-

ing that users of telecommunications equipment are protected from pos-

sible harm through approving equipment; setting out interconnection

guidelines and regulating tariffs (www.bta.org.bw/publications.html).

In summary, it can be said that in the main, the regulatory process in

Botswana has remained true to the founding five principles: competition,

private sector involvement, transparency, regulation and consumer pro-

tection. The section below looks at whether the three major goals in the

restructuring process have been achieved.


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BOTSWANA TELECOMMUNICATIONS POLICY GOALSUNIVERSAL SERVICE:

The policy document (Telecommunication Policy for Botswana 1995)

states this goal as follows, “…In Botswana, with 4.1 telephone lines per

100 inhabitants, there is still a long way to go in order to achieve univer-

sal services ie a telephone in every household desiring the service, at an

affordable price …” Thus the measure against which the growth and

development of the telecommunications sector is whether each house-

hold has a telephone connection when desired, and whether this service

is affordable. This is an objective difficult to achieve, and most other

African countries have aimed rather for universal access objectives of

simply providing services within reasonable walking distance.

In terms of access to voice services, cellular telephony access must be

included, which taken together with fixed-line service would indicate

that the desire for universal access is closer to being achieved - more

than 55% of the population has a telephone connection of some sort (BTA

10 year commemorative brochure 2006). Given that the average

Botswana household size was around 4 people per household (CSO, 2001

Population and Housing Census, and Master Sampling Frame- 2001 Cen-

sus), if the distribution of cellular and fixed-line telephony was evenly

spread throughout the country, half the people in each household would

own a cellular phone and/or have a fixed-line phone. From a demand side

survey on e-access carried out by the RIA! team in Botswana in 2004,

access to ICTs was skewed heavily towards people in the urban centres

(Sebusang et al 2005) meaning that while current statistics of cellular

phone ownership indicate the possibility of universal service, this is

likely to be so only in the urban and other major population centres, with

very little in the smaller, rural areas.

The move towards universal service in the fixed-line market is far from

being realised. In fact starting out at a teledensity of 4.1 per 100 people

in 1995, and peaking at about 8.8% in 2002 (or 35.2% of households,

assuming households of 4 persons), the teledensity has declined since

that peak and now hovers around 7.9% to 8%. These figures look likely

to fall even further, particularly at household level as a result of the tar-

iff rebalancing by BTC which has resulted in costs of access and local

usage increasing (Sebusang et al 2006), whilst international call rates

have fallen. Thus considering that any meaningful access to and usage

of the Internet depends to a large extent on the availability at household

level of fixed-line telephony, the universal service dream is far from being

realised and will remain a policy and regulatory challenge for some time

to come.


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UNIVERSAL ACCESS AND SERVICE POLICY (AND FUND) 2006

The sluggish pace at which the crafting of a universal access and serv-

ice policy and the starting of a universal service fund were undertaken,

coming exactly a decade after the founding of the regulator, and eleven

years since the goal was espoused in the Telecommunication Policy of

1995, have not helped matters. The draft policy went through the normal

stakeholder consultative process in July/August 2006 and is envisaged

to be completed by year-end. It is only through a strategic approach to

the quest for universal access and service of ICTs that the country can

begin to make headway towards reaching the position of having commu-

nications services reach even the remotest areas and households. The

policy formation processes as well as the regulation processes have

failed to deliver universal services in the 10 years since the sector liber-

alisation commenced.

RURAL TELECOMMUNICATIONS STRATEGY 2006

The greatest indicator of this failure to reach universal service is mani-

fest in rural Botswana where, compared with major urban and other

urban (village) residents, as per the 2004 e-access survey (Sebusang et

al 2005), less than 10% of households in rural Botswana had either fixed-

line phones or electricity connections. These numbers compare with the

more than 30% of households with fixed-line phones in both major urban

centres and urban villages; and about half of all households in these cen-

tres with mains electricity. Thus while even in the more advantaged

urban households universal service is still unavailable, it is even less

available in the rural areas. One can thus appreciate the need for a spe-

cific rural telecommunications strategy document to ensure that citizens

in the countryside have equal access to ICT services enjoyed in towns.

The strategy document proposes, in consonance with the draft universal

access and policy document, that whilst rural telephony provision should

attract some form of subsidy (from the universal service fund), its imple-

mentation must be such that competition is encouraged, therefore no

exclusivity period should be awarded to whoever wins the rural teleph-

ony licences. Further, the draft universal access and service policy advo-

cates that the licensing should not be technology-prescriptive, thus

allowing for the possibility of both fixed-line and mobile service solu-

tions or a combination thereof.

EFFICIENT SERVICES:

Efficient services are understood in the policy as “modern and efficient

telecommunication infrastructure and services” to allow for opportuni-

ties for economic diversification, which we interpret as meaning a mod-

ern infrastructure allowing for the provision of efficient services. From

2005, on the infrastructure side where BTC’s main transmission back-

bone is all digital, BTC has ushered Botswana into the broadband Inter-

net world through the deployment of ADSL (BTC Annual Report 2005),

thus further prescribing the necessary conditions for the rendering of

efficient services. It is difficult to assess whether services have in fact

been efficient, but given the fact that broadband access is now slowly

becoming possible, and Internet access is now also possible through cel-


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lular phones (eg MASCOM’s GPRS), efficiency in provision of services

and in their diversity is growing. However, an unrealised goal of the

restructuring of the telecommunications sector could be the positioning

of Botswana as an Internet hub for SADC through the Ministry of Com-

munications Science and Technology (MCST) and the soon-to-be-

adopted ICT Policy (Maitlamo). Judging by the number of complaints

from other economic players requiring a robust telecommunications

infrastructure/service to allow for practices such as business process

outsourcing (BPO) advocated by the International Financial Services

Centre (www.ifsc.co.bw ), it would seem the country is not yet ready to

aggressively exploit this potential.

Another contributing factor is the policy, and hence regulatory lag

behind South Africa in areas such as legalising VoIP. South Africa moved

on this in 2005, whilst Botswana took a year (July 2006). Whilst in South

Africa, after much delay, number portability was introduced in late 2006,

in Botswana the regulator appears not to have appreciated the impor-

tance of this critical market parameter, which will not only force

providers to increase service quality in order to retain customers, but

will also be economically productive for the country, since money that

might be used to purchase a start-up kit when switching providers could

then be used in other economic areas.

REGIONAL BALANCE:

As should have become abundantly clear, the growth and development of

the telecommunications sector has not had an even or balanced geo-

graphical spread. As with most innovations, it has tended to benefit the

urban and richest part of the community, with very little benefit accruing

to the rural districts and villages. Thus, while peri-urban and other rural

villages close to major urban centres have had access and services

through their proximity, the villages further away have had very little in

terms of access to telephones (fixed-line), though there is some presence

when one considers cellular telephony.

It appears that while mobile telephony has to a large extent responded

to all three policy goals and largely achieved them (other than in the

issue of affordability), the other areas of the communications field are

far from realising these goals. The major policy and regulatory chal-

lenge, and certainly the failure of the partial liberalisation that has

existed over the last 10 years, has been the lack of a universal access and

service policy, and thus strategies to ensure that even rural Botswana

joins the information age and economy. The measure of policy and regu-

latory success in the next decade will be defined by the residents’ access

to cost-effective Internet services that traditionally piggy-back on fixed-

line telephony, but perhaps the future will herald a different platform to

deliver voice and data to the end-user at a comparable cost, without nec-

essarily using wireless.


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Conclusions and Recommendations

Botswana, which is an upper middle-income country, has not fared very

well in terms of comparable statistics on the use of and access to a broad

range of ICTs, particularly fixed-line telephony and the Internet. When

this is juxtaposed to the desire for Botswana to become the SADC Inter-

net hub, and the relatively superior performance of other upper middle-

income countries such as Mauritius, the conclusion can be drawn that

the country has some way to go to become the regional hub, as well as to

make its economy more competitive via the communications sector. How-

ever, ample opportunities exist for the country to perform far better than

it has fared this far, and the excellent performance in the cellular teleph-

ony market should be an example of what is possible with proper liber-

alisation, regulation and competition. The excellent regulatory perform-

ance so far should stand the country in good stead to continue making

the communications sector a viable and sustainable contributor to

Botswana’s future economic competitiveness.

For Botswana to achieve this success, the following challenges must be

overcome:

! Reduction of ICT access and usage costs across the spectrum of serv-

ices;

! Care to ensure that tariff rebalancing by the BTC as a consequence

of further liberalisation does not continue eroding access to and

affordability of fixed-line telephony for the average household. Thus

the dwindling or near static user statistics need to be reversed;

! Transformation by the BTA of its role, from a telecommunications

regulator to a broader communications regulator encompassing a

broad range of ICT sectors and broadcasting. This presents both pol-

icy and regulatory challenges in terms of both vision (the need for this

type of regulator by government) and the technical and human

resource constraints under the expanded regulator;

! Regulation of the BTC (assuming it still provides most of the trans-

mission facilities to mobile phone companies) where, due to service-

neutral licences, it also provides cellular telephony;

! Regional balance in the provision of services to help plug the glaring

urban-rural ICT divide.

! Affordable and pervasive broadband Internet access.

To address all these and move closer to the desired regional hub status,

the country must:

! Speed up the implementation of rural telecommunications as well as

universal access and service policies;

! Return to the regulatory authority its independence over regulatory

matters and have government concern itself with policy matters only;


BBoottsswwaannaa


! Expedite the awarding of the three operators (BTC, Mascom and

Orange) service-neutral licences with robust regulatory stipulations

to ensure BTC does not favour its cellular subsidiary at the expense

of other providers;

! Make the BTA the sole regulator in the communications sector, thus

merging telecommunications, broadcasting and other related ICT

sub-sectors under one regulatory roof;

! Reduce the costs of access to the Internet as well as usage of fixed-

line telephony;

! Enhance further competition by allowing mobile-number portability.

The restructuring of the telecommunications landscape in Botswana has

opened up new areas of economic activity. The regulator as well as the

operators, particularly of mobile telephones, has increased access to

voice services more than seven-fold over the decade, thus ensuring that

most Batswanas have some access to modern telecommunication serv-

ices. The challenge for the next few years is to see further transforma-

tion, especially in fixed-line telephony and the Internet. When looked at

from a regional or even Africa-wide perspective, Botswana offers serv-

ices at relatively modest cost. To become a leading provider of ICT serv-

ices, the country must reduce usage and access costs to make them com-

parable with those of leading economies.


ReferencesBotswana Telecommunications Authority website (www.bta.org.bw/publications.html).

Botswana Telecommunications Corporation (Amendment) Act 1996, Government Printer, Gaborone,

Botswana.

Honourable Pelonomi Venson, MP, Minister of Communications, Science and Technology, Press State-

ment, Further Liberalisation of the Telecommunications Sector, 21 June 2006.

Icegate Solutions Inc. (2006), (Draft) Rural Telecommunications Strategy, prepared for the Department

of Telecommunications and Postal Services, Ministry of Communications Science and Technology.

Intelecon Research & Consultancy Ltd (in Association with ICT Consultants) (2006), Development of a

Universal Access and Service Policy for the Communications Sector in Botswana, Final Interim

Report, submitted to the Botswana Telecommunications Authority.

International Financial Services Centre (IFSC), www.ifsc.co.bw.

International Telecommunications Union (2001), The Botswana Telecommunications Authority (BTA)

and The Telecommunications Regulators Association of Southern Africa (TRASA) Effective regula-

tion Case study: Botswana. A Case Study on Effective Regulation in Sub-Saharan Africa and Regional

Cooperation.

International Telecommunications Union (2003), Botswana Mini Case Study 2003: Recent Experiences

in Interconnection Disputes (www.itu.int/ITU-D/Case_Studies/Disp-Resolution/Botswana.pdf).

Hall, R and Lewin, D (2005), OVUM , Recommendations on further liberalisation of the telecommunica-

tions industry of Botswana, A final report to the Botswana Telecommunications Authority.

Milne, D Palmer, C and Yeabsley, J (2000) (New Zealand Science and Technology Consortium) Focussing

Investment in Innovation: On the coordination and rationalisation of science and technology and

research and development in Botswana. Report to the Ministry of Finance and Development Plan-

ning.

Ministry of Finance and Development Planning (1998), Science and Technology Policy, Government

Printer, Gaborone, Botswana.

Ministry of Finance and Development Planning, Central Statistics Office (2001), 2001 Population and

Housing Census.

Ministry of Works, Transport and Communications (1995), Telecommunications Policy for Botswana,

December 1995, Government Printer, Gaborone, Botswana.

Ministry of Communications Science and Technology (2004), Telecommunications (Amendment) Act,

Government Printer, Gaborone, Botswana.

Ministry of Communications Science and Technology (2006).

Ministry of Communications Science and Technology (2006), Telecommunications (Amendment) Act,

Government Printer, Gaborone, Botswana.

Presidential Directives (1992): CAB. MEMO/98 SWC 13/30, An Appropriate Ownership for Mobile Tele-

phones in Botswana.

Presidential Directives (1992): CAB. MEMO/117 SWC 13/30, Competition in the Provision of Telecommu-

nications.

Sebusang, SEM, Masupe, S and Chuma, J (2005) Chapter 3; Botswana, in A Gillwald (Ed) Towards an

African e-Index: ICT access and Usage 2005. ResearchICT Africa, the LINK Centre, Wits University

School of Public and Development Management.

Stork, C and Esselaar, S (2006): Towards an African e-Index – SME e-Access and Usage, ISBN 100-

620-37593-0.

Telecommunications Act, 1996, Government Printer, Gaborone, Botswana.

BBoottsswwaannaa



2007 BotswanaTelecommunications

Sector Performance Reviewaa ssuuppppllyy ssiiddee aannaallyyssiiss ooff ppoolliiccyy oouuttccoommeess

S E M SEBUSANG

M P MAKEPE

T D BOTLHOLE

This Policy Research Paper Series is madepossible through the support of the International Development Research Centre(IDRC)

For further information see http://link.wits.ac.za

Tel:+27 11 7173913

Fax:+27 11 7173910

LINK Centre

Graduate School of Public Development Management

Witwatersrand University

Johannesburg

Box 601, Wits, 2050

http://link.wits.ac.za

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