A report from Alliance for Affordable Internet (A4AI) entitled “The Affordability Report” revealed that Botswana currently ranks No.2 in Africa in internet affordability. Three years ago, the country’s broadband was incredibly expensive, ranking Botswana among the highest on the African continent.
Today, as commodity prices are rising in Botswana, the cost of data and internet use is significantly falling.
The price reductions on mobile broadband by public telecommunications operators are underpinned by increased demand. During the months of June and July 2020, Botswana Communications Regulatory Authority (BOCRA) embarked on a mission to reduce broadband prices to enhance the affordability of services.
BOCRA engaged mobile operators to discuss opportunities for reducing prices for mobile broadband or data bundles. The outcome of the engagement was a substantial reduction in prices for data bundles and a substantial increase in volumes at unchanged prices by Mascom Wireless and Orange Botswana. Prices for BTC data bundles remain unchanged as the service provider posited, they were competitive.
BOCRA notes that there were price reductions by up to 46% between 2019 and 2020. Price reductions for mobile broadband occur every twelve to eighteen months. The most notable price reduction over the years is an offering of P149.00 for an 800MB package of 30 validity in 2016, which in 2020 was converted to P149.00 for 8GB, making the package tenfold cheaper. It is anticipated that the price reductions would translate into increased adoption of digital solutions and usage by consumers.
According to BOCRA, in comparison amongst South Africa, Kenya and Namibia, it is noted that all the selected countries are on the coast, making international broadband internet connectivity more affordable for them. In the case of Botswana, transit passage to the undersea cables for carriage of international internet is leased through the Indefeasible Right of Use (IRU) in Namibia and South Africa. The aspect of geographic location places Botswana in a compromised position in terms of competitiveness.
Mobile broadband prices in Botswana are generally lower than prices in South Africa and Namibia by considerable proportions. In contrast, Kenyan operators offer much lower prices than Botswana, and this is not unexpected given population density, level of development of telecommunications/media/technology and geographic position of Kenya.
As a result, the adoption of mobile broadband in Botswana has grown tremendously, reaching 101 subscriptions per 100 head of population in March 2020. Fixed and fixed wireless broadband reached three subscriptions per 100 head of population while household access to broadband stood at 63%, with the most prevalent access technology being mobile broadband.
Mobile broadband has become more affordable, with prices being reduced by up to 46% for 30-day prepaid packages in 2020. In Botswana, broadband is embraced as a facilitator of information exchange and commerce. Broadband is largely offered via mobile infrastructure which has high penetration level of over 160%. Fixed wireline and fixed wireless broadband penetration are minimal at a total of around 3.5%. It is only recently that there were major network development plans that would increase outreach and penetration of fixed wireline and fixed wireless broadband.
The number of mobile broadband subscriptions has increased by 16.3% (284,812) from 1,752,547 in March 2019 to 2,037,359 in March 2020. The significant increase in uptake of mobile broadband is attributable to several reasons including ownership of more than one SIM-cards by consumers to enjoy different mobile offers by operators; improved affordability due to recent price reductions; reduced movement during extreme social distancing leading to extensive use of electronic platforms; self-service on utilities as well as surfing the internet to apply for movement permits. An increase in the number of subscriptions is expected during 2021 and beyond as Botswana moves towards a digital economy and, operators introduce more affordable products and services in the market.
Botswana made one of the largest leaps in the A4AI Affordability Drivers Index, (ADI) this year, moving up nine positions, and is the closest that a sub-Saharan African country has gotten to the Top 10 in the current model, while also taking the highest score in Africa for broadband strategy. In considerable part, this leap was fuelled by the adoption of a new broadband strategy in mid-2018 that has been an exemplar for the region.
The 2018 broadband strategy in Botswana makes specific recommendations for a coordination committee to carry the plan’s targets into implementation and reserves space on this committee for multiple governmental ministries, the private sector, academia, and consumer advocate.
Asymmetric Digital Subscriber Line (ADSL) is the most prevalent type of fixed wired broadband and is provided through BTC network infrastructure. BTC plays in the wholesale and retail ADSL markets, meaning that they offer wholesale ADSL to ISPs and then compete with the ISPs in the retail market. ADSL is mainly offered using a standard copper telephone line. One of the advantages of ADSL is that it can be priced affordably based on the contention rates. The disadvantage of ADSL is that it can be unreliable in terms of throughput which depends on the distance from the telephone exchange. BOCRA has noted a decline in fixed-broadband subscriptions over the years from 59 590 in March 2017 to 29 352 in March 2019 and a slight increase to 33 628 subscriptions in March 2020. The depicted decline was attributable to data-cleaning and validation that was conducted over the years that resulted in the deletion of an invalid count of customers.
In line with its mandate of facilitating the provision of, among others, affordable communications services throughout the country BOCRA approved price reductions for fixed broadband internet services offered by Botswana Telecommunications Corporation (BTC) with effect from 23 June 2021.
The approval ensures a reduction in prices of fixed broadband internet services by up to 40% for a 3-year package allowing consumers to access higher internet speeds at affordable rates.
BOCRA aims at making ICTs affordable to citizens to facilitate distance learning and working from home as the economy grapples with the challenges of the Covid-19 Pandemic. The price reduction is, therefore, in line with the government’s objective of transforming Botswana from a commodity-based economy to a knowledge-based one. The reduction of fixed broadband internet services prices follows a similar reduction of mobile data prices approved in July 2020.
In terms of fixed wireless broadband, BOCRA noted that as of December 2020, residential customers constitute the highest number of fixed wireless broadband subscriptions at 89% of the market. The largest number of residential subscriptions, at 50%, is for the 256Kps to 2Mbps customer segment. Residential customers prefer the speeds primarily because of affordability factors. On the other hand, the business customers mainly subscribe to speeds of 2Mbps to 10Mbps and such subscriptions constitute a significant 87% of the market.
A comparison between June 2019 and June 2020 indicates that residential access has increased by 46% from 18,977 subscriptions to 27,676. The growth in residential subscriptions is attributable to customers who were working remotely due to extreme social distancing as prescribed by the COVID-19 protocols and as such businesses had to connect their employees for business continuity. Fixed wireless subscriptions by businesses also increased by 32% from 2,500 subscribers in June 2019 to 3,292 subscribers in June 2020.
Further analysis showed that urban areas consist of 96.24% of fixed wireless broadband subscriptions and 3.63% are subscriptions in rural areas. Agricultural areas account for 0.09% of subscriptions. Internet Service Providers (ISP) have plans to roll out more fixed wireless broadband in the rest of the country in 2021 and beyond. This will increase access to the internet in villages, bringing connectivity closer to the National Broadband 2018 Strategy targets, lessening Botswana’s digital divide.