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The proposals put forward to the BTA by consultants Ovum seem shaped largely to reflect the dilemmas posed by BTC rather than to create a genuinely competitive market. There is a genuinely expressed fear that BTC’s national network would be in financial and operational peril if the liberalisation was not highly controlled and stretched out over a long period of time. This fear seems misplaced as we are not aware of any instance where an incumbent telco has declared bankruptcy or closed down.

Those attending the event criticised the proposals as being too much, too soon or as being too slow. There were also those who challenged the whole notion of liberalisation but as former BTA adviser Claes Rosvall pointed out the country committed itself to this course way back in 1995. But whatever criticisms were thrown at the recommendations, David Lewin of Ovum was right when pointed out that: “Something must change.”

The Ovum report pointed out that there was scope for:
much stronger cross platform competition between the three main incumbents BTC, Mascom and Orange;
entry by fixed wireless access operators in the major towns. Such entrants might offer packages of voice and fast internet access using new technologies like WiMax to deploy such services quickly and cost effectively. This could enable the Botswana industry to leapfrog over other countries in its telecommunications development;
some entrants to work with utilities such as the Botswana Power Corporation to make commercial use of its extensive fibre-based transmission network; and
strong competition to lower the prices of international and long distance services through use of voice over Internet protocol (VoIP) technology.

The report has twelve main proposals:

Proposal 1: Botswana should move to full liberalisation of its telecommunications industry as fast as possible given the need to minimise potential costs.

Proposal 2: as far as is sensible Botswana should adopt a policy of infrastructure based competition, for the first three years of full liberalisation.

Proposal 3: BTA should allow all suitably qualified organisations to provide international services and facilities and lift the ban on VoIP services from mid 2006.

Proposal 4: by mid 2006 the Ministry of Communications of Science and Technology should establish Botswana International, a commercial organisation, owned partly by the Government and partly by the operators, to supply international wholesale services to all service providers which supply retail international services in Botswana.
This proposal is designed to deal with the problem of fragmented supply of international facilities introduced by Proposal 3. Such supply leads to a major loss of economies of scale and bargaining power when compared with what the consultants describe as “an efficient monopolist”.

Proposal 5: the BTA should allow mobile operators to self provide infrastructure for mobile, but not fixed, services immediately.
This modest proposal should reduce the costs and increase the quality of the services offered by the mobile operators. It is a first step to the more wide ranging Proposal 6.

Proposal 6: the BTA should allow all suitably qualified organisations to provide fixed national services and facilities (excluding VoIP) from September 2005 .

Proposal 7: the BTA should mandate mobile virtual network operator (MVNO) access to the mobile networks of Mascom and Orange by September 2005.

Proposal 8: the BTA should not issue a third nation-wide mobile licence but should explore the implications of issuing a third mobile licence without rollout conditions.

Proposal 9: the Government should proceed with liberalisation and the privatisation of BTC independently.

Proposal 10: the BTA should develop guiding principles on how it will regulate a fully liberalised industry so as to give potential entrants certainty about the regulatory conditions under which they will operate.
We suggest that these principles should include:
independent, predictable and transparent regulation;
proportionate regulation in which the benefits of any regulatory measure are demonstrated to outweigh the costs; and
regulatory forbearance so that market mechanisms operate wherever possible and regulation is kept to the minimum.

Proposal 11: so as to ensure the success of full liberalisation, the BTA should focus its efforts on a number of key functions. These should include:
strengthening the processes the BTA uses for protecting and empowering consumers;
licensing a growing number of service providers;
focusing price regulation only on those retail and wholesale services where regulation is necessary;
efficient spectrum management to ensure an adequate supply of spectrum for competing operators;
a review of the infrastructure based policy of Proposal 2 in mid 2009; and
publishing more information on the Botswana telecommunications markets to help potential investors evaluate possible entry.

Proposal 12: the Government should adopt subsidy schemes to ensure that a fully liberalised, profit maximising, industry supports its ICT policy.
With the creation of the national competition law proposed for 2005, the telecommunications sector will be subject to two parallel forms of regulation:
ex post regulation based on the new competition law which will constrain the behaviour of dominant operators; and
ex-ante sector specific regulation which will provide rules in advance on how players should behave.
To ensure proper co-ordination and consistent outcomes from these two parallel processes we make two further proposals.

Proposal 13: the National Competition Authority which will be created with the enactment of the new competition law, should decide competition disputes in the telecommunications sector with expert advice from the BTA

Proposal 14: the National Competition Authority and the BTA should develop a common approach to market definition and assessment of dominance and hold regular informal meetings to ensure a consistent approach to regulation of the telecommunications sector.

The position in terms of liberalisation was further complicated by the fact that the BTA is also due to receive a separate consultants’ study from Analysys. Obviously the recommended timetable for rebalancing has to go hand-in-hand with the wider recommendations.

The detailed workshops to look at the consultant’s different proposals seemed to produce responses and recommendations that were much more engaged and forward-looking than the plenary sessions. There was a concern that BTC should be allowed to compete on fixed as well as mobile. It was felt that there should be a full third mobile operator (with local participation), not an MVNO. There was support for infrastructure competition and opening up the international gateway. The latter seemed to attract repeated questions about national security which seem somewhat misplaced when you think about the hundreds of gateways developed countries operate that face far more serious security threats than Botswana. However it is understandable that change makes people nervous. There was no great enthusiasm for an international bandwidth company as another state entity was not seen as the answer to the problem of expensive international bandwidth.