Further Liberalisation of the Telecommunications Sector

21 June , 2006
Further Liberalisation of the Telecommunications Sector

A) Further Liberalisation of the Telecommunications Sector

The Government, through this statement, wishes to announce its decision to further liberalise the telecommunications industry in Botswana.
The Telecommunications Policy for Botswana which was adopted in 1995 called for the introduction of competition in the telecommunications sector, and this was followed by the enacting of the Telecommunications Act of 1996. Prior to that BTC was a monopoly with a mandate to provide all the telecommunications services to all areas. The implementation of the Telecommunications Act led to the creation of Botswana Telecommunications Authority that later issued cellular licenses to Orange Botswana (formerly Vista) and Mascom Wireless Botswana, Internet Services Providers (ISP) licenses and Data licenses.
The economic benefits realised from the partial liberalisation that was done in 1998 includes price reductions for services in the last seven years, more choice of products to consumers, Foreign Direct Investment (FDI) by external investors in Mascom and Orange, citizen ownership and participation in the telecommunications services sector.
The time has now come to further liberalise the industry in order to increase competition with enhanced quality services at reduced cost. Thus I am happy to relay the Government’s decision to institute the following measures to open up the industry.

	Activity	Time	Comment
1)	Lift the restriction on the provision of VoIP by value-added network service providers.	1 August 2006	“Lift the restriction on the provision of VoIP by value-added network service providers” means allowing Voice over Internet Protocol to be provided by Internet Service Providers (ISP). This is equivalent to issuing voice licenses to ISPs at national and international level, the market currently serviced by BTC, Mascom and Orange only.
2)	Mobile operators start self providing (transmission links)	1 August 2006	“Mobile operators start self providing (transmission links)” means allowing Mascom and Orange to build their own backbone infrastructure to carry their traffic. Currently they are compelled to use the BTC infrastructure.
3)	Current fixed line and cellular operators may apply for service-neutral licenses.	1 September 2006	“Service Neutral Licenses” are those licenses that allow an operator to provide all telecommunications services including voice, data, and irrespective of whether the service is transmitted wirelessly or on a wire.
4)	New entrants may tender for service-neutral rural/ district level licenses	1 September 2006	See above
5)	Liberalisation of the international voice gateway	1 October 2006	“Liberalisation of the International voice gateway” means allowing other players to provide international switching and transmission of voice services, the market that is currently a monopoly to BTC.
6)	BTC attains a satisfactory level of tariff rebalancing	December 2007	“BTC attains a satisfactory level of tariff rebalancing” means allowing BTC to significantly complete their ongoing exercise of adjustment of their tariffs to align them with costs.
7)	New entrants may tender for service-neutral national licenses	December 2009	See above explanation of “service-neutral licenses”.

B) Privatisation of the Botswana Telecommunications Corporation

Government also wishes to let the nation know that a decision has been made to privatise Botswana Telecommunications Corporation. This will be done by selling off a portion of about 40% of the equity to a strategic equity partner. Furthermore it has been decided to allot a small portion of shares of about 5% to citizen employees of BTC, to place another portion of shares in a privatisation trust fund (15 – 25%) for sale to future generations of Batswana, and to retain some 25% to 30% of the shares for later sale to the public by way of stock market listing.
The implementation should start immediately.

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