20 Feb 2017

It has been established that the retail price for mobile voice is significantly higher than the cost of providing the service.
Minister of Transport and Communications, Mr Kitso Mokaila said, “the current pricing regime by mobile providers is such that prices for voice services are used to subsidise mobile broadband data costs.”

Responding to a parliamentary question on Thursday, Mr Mokaila said the outcome of the recent Cost and Pricing Study undertaken by Botswana Communications Regulatory Authority (BOCRA) has revealed that the cost of providing mobile broadband is significantly higher than the retail price consumers are charged.

Mr Mokaila said the study has revealed that the cost of doing business in Botswana was high in general and in particular providing telecommunications/ICT services.

He said this was due to the fact that the country has unique characteristics of large land mass, relatively small population, landlocked and almost all ICT equipment and solutions are imported.

Mr Mokaila said in order to address the challenges; his ministry has developed a Broadband strategy with overall vision to connect every citizen, business, communities and the country to a high–speed broadband infrastructure at appropriate quality of services and affordable prices.

He further said as part of the implementation of the strategy to address high tariffs ,government through Bofinet is deploying the national fibre backbone to connect villages to the telecommunications network as well as rolling out fibre to the premises (FTTx) in cities ,towns and some major villages.

Mr Mokaila said through BOCRA, his ministry would implement a pricing framework that seeks to align to cost, the retail prices for mobile voice and mobile broadband.

He said implementation of the framework would be phased over three years starting in the second half of 2017and would be communicated to the public as soon as consultation with mobile operators was completed.

Mr Mokaila said the roll out of the national fibre backbone was meant to reduce the burden of providing service by developing the key ICT infrastructure.

“This is very expensive for individual operators to roll out themselves.

All operators are instead utilizing this infrastructure on open access and transparent principles,” he said.

Furthermore, the minister told the House that BOCRA has been mandated to regulate prices for telecommunications/ICT services, Parliament has heard.

BOCRA has been conducting studies to determine the cost of providing services and the appropriate pricing levels.

He said at inception of mobile service in 1998, the price for mobile voice call was P2.00 per minute, and prices for various minutes’ packages had been declining with the current price for voice calls ranging from P0.45 per minute to P1.65 per minute depending on the type of the package.

Mr Mokaila said the price of mobile broadband data ranges from P0.13 per Megabyte (MB) to P0.67 per MB depending on the type of package subscribed for.

“The principle is that prices must, to the extent possible, reflect the cost of providing a service, irrespective of number of minutes called or size of bandwidth transacted,” he said. BOPA