LESOTHO - GOVT SELLS INCUMBENT AND OPENS UP INTERNATIONAL CONNECTIVITY A BIT

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You don’t get to hear much about Lesotho but it has an interesting story to tell. The good news? It has recently sold off 70% of its incumbent telco to a consortium that includes Econet and South Africa’s Eskom. The bad news? The price has been a five year exclusivity agreement. The silver lining? An agreement with the regulator that encompasses roll-out targets. It has also opened up international connectivity through VSAT licences and a competitor to the incumbent. Russell Southwood spoke to T Khabele, Chief Executive of the Lesotho Telecommunications Authority about what’s happening and future plans.

What’s the current position of the incumbent?

Telecom Lesotho has already been broken down. A 70% shareholding has been bought by a consortium of three companies: Mauritius Telecom; Econet International and Eskom Enterprises). 30% is still held by the Government. The plan is to sell this remaining shareholding to Lesotho nationals at a later date. No timescale has yet been set for the this sell-off.

Lesotho Telecom has been given exclusivity for five years and that period ends in February 2006. The exclusivity covers voice, data and leased lines nationally.

It was also has been given an option to apply for a cellular licence and they’ve done that through Econet.

Some obligations go with the exclusivity. It has to provide over a five year period an additional 150,000 subscribers all over the country. A certain percentage - twenty-five percent - have to be rural.

Are there other cellular operators?

Vodacom Lesotho. It was a joint venture between Vodacom and Lesotho Telecom but was sold when the latter was itself sold.

What sort of subscriber levels have they got?

Econet started up in June 2002 and has 24,000 subscribers, of which 18,000 are active. In other words they’ve made a call in last year. Vodacom Lesotho has 101,000 subscribers, of which 78,000 are active.

How many ISPs are there?

Three. Leo, Squareone and Adelfa. Between them they have a total of 1,500 subscribers.

Are you running a Universal Service Access Fund?

We have decided that our strategy for the next three years from April this year will not be to establish a Fund but to discuss with the network operators what their annual obligation in terms of roll-out will be. So for example, we will discuss with the cellular operators how many base stations they will roll-out this year.

Is there a monopoly on international connectivity?

At the moment we give VSAT licences to international organisations like the UN, embassies and the multinationals. We have also licensed Bethlehem Technologies Lesotho who will trade as Oscar Telecoms to offer broadband and international broadcast in the country and the licence allows them to connect internationally. It’s a second point of international connection, giving competition. And it’s completely independent.

Who’s it owned by?

A consortium with companies (including New Skies) from South Africa and Lesotho.

What will be the biggest challenges for the regulator over the next five years?

The first challenge is expanding internet provision, particularly to the 12 or so towns outside the capital Maseru. To achieve this we need to make sure the network reaches every place with the capacity to connect to the internet.

The second big challenge is to ensure that ICT services generally - including multimedia and broadcast - are available. We need to address the full range of e-readiness issues and start providing e-services.