The Botswana Communications Regulatory Authority (BOCRA) has accused one of the telecommunications operators, Mascom Wireless Botswana of abusing its dominant position in the local market.
The accusation follows an urgent court case in which Mascom wireless sought to challenge the decision by BOCRA to force the country’s three teleco companies ÔÇô Mascom Wireless Botswana, Orange Botswana (PTY) Limited and Botswana Telecommunications Limited (BTCL) to slash some of their tariffs relating to the On-net/Off-net mobile voice calls. The case which was before High Court Judge Leatile Dambe was dismissed on the same day with reasons for dismissal expected to be read out this coming week.
According to the court papers seen by the Sunday Standard, the three companies have also been instructed by BOCRA to review their tariffs annually to remove the Off Net premium for all their services over a two year period ending June 2018.
Also in the directive, issued on 24th March 2017, BOCRA gave the three operators an option to either remove Off-net premium simultaneously with reductions in of mobile termination rates or remove Off-net premium in a shorter period.
On Thursday, Mascom Wireless, which opposes the proposed price reductions, dragged BOCRA to court in a bid to challenge the regulator’s directive. The leading teleco company, whose majority shareholder is the Botswana Public Officers Pension Fund (BPOPF), also accused BOCRA of favouring the other two operators ÔÇô BTCL and Orange Botswana in its imposition of the proposed price reductions.
However, in his answering affidavit, BOCRA’s acting Chief Executive Tshoganetso Kepaletswe accused Mascom of abusing its dominant market position by distorting its charges through what he called “Club effect”.
“Club effect is where a service provider, normally large operators create distorted pricing such that more and more customers are attracted to subscribing to this network because it offers the cheapest On-Net prices”, explained Kepaletswe.
It is said that in January 2016, BOCRA engaged Interconnect Communications (ICC or Consultant) to develop a cost model and pricing framework for both wholesale and retail services in the ICT market in Botswana. The regulator is said to have drafted its 24th March 2017 directive in line with recommendations from the report compiled by the consultants dubbed, “Cost model and Pricing Framework” to impose the proposed price reductions.
Kepaletswe further told the court that, “the main objective of the project was to develop cost models and pricing framework that is relevant for use now and in the future to calculate the cost of providing wholesale and retail service services for mobile, fixed and internet services”.
