BOCRA defends internet price slash

Portia Nkani - BG reporter
Tuesday, 02 June 2015
BOCRA defends internet price slash

Botswana Communications Regulatory Authority (BOCRA) has refuted protestations that internet bandwidth price reductions have not translated to the end consumers, as consumers allege.

This publication has gathered from a number of forums held in Gaborone by various stakeholders that customers decried high Internet prices despite numerous price cuts by the Botswana Telecommunications Corporation’s Limited over the last two years. BOCRA Director of Communications, Aaron Nyelesi responded to BG Business recently that, “It is incorrect to suggest that reduction in bandwidth wholesale tariffs has not trickled to the customer. It should be noted that the reduction on bandwidth affects mainly the price of Internet services and BOCRA has seen reduction of Internet prices over time for the end user.” BOCRA’s submission which regulates Public Telecommunications Operators depicts price reduction of ADSL (internet) services that are enjoyed by customers as follows: Bronze package prices reduced by 52 percent between 2013 and 2014 from P547.23 to P264.33 (per 512/128kilobytes per second-kbps); Platinum reduced from P943.00 to P654.25.

In addition, prices were reduced twice in 2014 in line with reduction in wholesale prices. According to BOCRA, Public Telecommunications Operators (PTOs) have also been reducing Internet prices for the prepaid customers to more affordable packages. What also transpired from a BoFiNet stakeholders’ seminar earlier this year was that BOCRA as the regulator has always indicated that there is no legislation that compels it to take action against those network providers that do not cut down prices to consumers. Therefore, they are calling for BOCRA to tighten the regulation. In response, Nyelesi explained that provision of Internet services is a fully liberalised and competitive market with many service providers in operation including the Value Added Network Service (VANS)/Internet Service Providers (ISPs). “Regulation of prices is focused on areas where the competition is limited.

BOCRA can still regulate if competition fails. However, such a scenario has not yet been reached in our market.” He additionally submitted that, “There is price regulation for most of the services that PTOs provide because there are only three players in the market.” In 2011 BOCRA issued a directive to all the three PTOs to implement new prices and they obliged, he said. He highlighted that retail service packages are many and varied. There are packages that can be purchased for as low as P9.50 a bundle. The lower the bundle capacity the higher the price per meg and vice versa.

Only Orange Botswana introduced prepaid data bundles in 2011 while Mascom, charged per meg. Botswana Confederation of Commerce Industry and Manpower (BOCCIM) ICT sector chairman, Neo Nwako at one of the forums told BG Business that the creation of BoFiNet has helped at corporate level as prices have since dropped even though it does not commensurate with excellent service. The remaining challenge however, he said is on individual market, adding that “the cost of Internet is extremely high especially mobile Internet, for instance 3G. There continues to be complaints that some retailers are not passing the price reduction to the end users. The consumer is still however spoilt for choice because there are a lot of service providers available. The only thing with BoFiNet is that it is not there to bring medium to long term Internet solutions to ensure that Botswana’s competitiveness is enhanced by connectivity using various technologies.”

Also HATAB Chief Executive Officer, Lilly Korong had indicated that the costs of Internet need to be reasonable, adding that the pricing currently is exorbitant. “As long as the regulator is not willing to change the legislation, customers will not benefit from the price reduction,” she said. According to the Southern African Development Community (SADC) mobile pricing comparison of 2014, Botswana is amongst the cheapest Internet providers. Botswana comes third after Tanzania and Mauritius in that order. Of Botswana’s three PTOs, beMobile is the cheapest provider of Internet services followed by Orange and Mascom coming third.

Last modified on Thursday, 04 June 2015 16:45

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