Botswana’s telecommunications market outlook is bright
The mobile market in Botswana has expanded, rising from zero in 1998 to 1.7 million subscribers as at the end of November 2008.
A recently conducted market study into the Telecommunications and ICT Sector in Botswana has revealed that 57 percent of the population owns a mobile phone and that this is bound to rise to 61 percent by 2014 with increases in coverage, wealth and changes in social norms.
The 61 percent mobile population penetration would translate into 107 percent SIM penetration once dual-SIMs is factored in.
It is against this backdrop that the Botswana Telecommunications Authority (BTA) held a stakeholders' consultative workshop on Market Study of Telecommunications and ICT Sector in Botswana last week. The study was conducted by an independent team of consultants, Analysys Mason, from the United Kingdom (UK), in association with Project3 of Botswana.
The study shows that Mascom Wireless reported 2007 annual churn out of 31 percent against Orange Botswana's 47 percent. Botswana's tariffs have decreased significantly in real terms since 1998 with the tariffs remaining constant despite high inflation.
It indicates that the mobile number portability, PTOs, rollout and take-up of 3G services will have a significant impact on the future evolution of the mobile market.
The study also indicates that the fixed line market in Botswana has stagnated since 2002 as mobile has become the preferred method of communication and that Botswana lies in a similar range to regional benchmarks, but is significantly lower than more developed East European benchmarks.
The study says that BTC has now completed a tariff re-balancing project to bring tariffs in line with costs, adding that this is necessary to make BTC competitive in the newly liberalised market.
"Local call rates and line rentals have increased dramatically by 500 percent and 750 per cent respectively. International call rates have decreased to almost the same extent.
"Despite these increases, fixed line prices remain in line with benchmarks. Fixed line prices remain cheaper than mobile prices.
"At the end of 2007, an estimated 20.8 percent households had a fixed line and this will increase to 21.5 percent in 2010 before decreasing slowly to 20.5 percent in 2014.
"ADSL growth will provide some impetus to fixed line growth, although this will be tempered by the rapid growth of wireless Internet technologies. Business expansion in Botswana will give a slow increase in non-residential fixed lines as their higher business call volumes will continue to benefit from cheaper per-minute rates. Over all, this will translate to an increase from 140, 951 fixed lines in 2007 to 152, 314 in 2014," it says.
The study also shows that the Botswana Internet market is still in its infancy, with low Internet penetration and extremely low broadband penetration due to high computer prices, high cost of services, low IT literacy, lack of local Internet content, power supply problems and perceived low quality service.
The number of wireless broadband subscribers, using ISPs operating on unlicensed spectrum bands, has also increased.
The study established that the international data gateway market in Botswana is not yet competitive. The ADSL access, leased lines, information data markets potentially need price regulation.
The study, presented by Consultants Dr Michael Kende and James Gibb, critically examined the past performance of BTA with a view to charting the future of the industry it regulates.
BTA board chairman Dr B.O. Tsheko said that over the past 12 years, Botswana has witnessed the transformation of the sector from a monopolistic telephony market into a more comprehensive and vibrant sector.
BTA chief executive, Thari Pheko, said that through the study, BTA would be able to determine whether to open up the market.
He advised the operators to keep their records properly so that whenever information is requested, it can be availed upon request."I appeal to all the industry players, especially the Value Added Network Service (VANS) providers to cooperate in the submission of data because we are going to start asking the VANS providers to submit quarterly returns as is the case with the PTOs. The study is important in our business plans."