Tuesday, April 20, 2021

BTA runs workshop on licensing and pricing

The Botswana Telecommunication Authority (BTA) this week held a two-day consultation workshop for its stakeholders to discuss issues pertaining to Spectrum Licensing and Pricing in Botswana.

The BTA intends to implement a spectrum licensing and pricing policy that would lead to the maximum positive impact on Botswana’s economic and social development “with a view to addressing the national infrastructure deficit, especially infrastructure required for wireless local loop and broadband access.”

Spectrum Licensing and Pricing is expected to contribute to a successful implementation of the new licensing framework in Botswana.

“The BTA is well aware that the traditional spectrum management practices of ‘command and control’ are not applicable in a liberalized market where there are no restrictions on the number of firms,” said Thari Pheko, the BTA Chief Executive Officer.
Pheko said, taking into consideration the need to create competitive markets, the BTA initiated a process of developing a spectrum management strategy.

“One of the tasks is to develop a spectrum licensing and pricing policy,” he stated, adding that a mechanism is needed to identify the firms which are most able to use the spectrum efficiently and to assign it to those firms in a manner which makes the demand for spectrum equal to its efficiency.
In relation to the spectrum management, Pheko said there are difficult decisions that need to be made. According to BTA, the objectives of spectrum management should be consistent with the overall objective of maximizing the welfare of the citizens of Botswana. Economic efficiency, a state in which the resources available to society are used to produce the bundle of goods and services most desired by consumers at the lowest possible cost, should be the default objective of radio spectrum management, said the report.

In other markets, Pheko stated that spectrum trading has been used to improve the efficiency in the spectrum management. BTA believes that if the principle of opportunity cost charging is not applied, the inevitable consequence will be inefficient use of spectrum and a loss to Botswana’s economy.

The main task of the spectrum manager, said the report, should be to ensure that users of spectrum face the opportunity cost of their use in order to promote economic efficiency and growth. The consultants consider that Botswana should opt for a simple trading. The first step is to implement a legislative framework which supports the principle of spectrum trading.
It is recommended that the BTA should consider making all spectrum users, including all government users, subject either to license fees or to other fees intended to cover the cost associated with spectrum management.

Touching on the spectrum licensing mechanism, Pheko pointed out that the auction method had been used to assign the spectrum in competitive markets and it has been identified as one of the efficient methods.

“Auctions yield better results with lower costs and less effort, and do not increase the costs of services,” the consultants said. They stated that the use of auctions for assigning usage rights to spectrum have been heralded as one of the major achievements of economical science.

According to the consultants report, most of the spectrum assignments in Botswana are held by government bodies and government owned companies. The most valuable ones among those held by private companies were assigned by a competitive tender procedure and are presumably already put to their highest valued use. In addition, they emphasized that spectrum licenses have limited duration, and the potential for sustainable windfall gains for others other than the government itself or the government owned entities seems limited. They recommended that considerations related to windfall gains be permitted to delay reforms.

Views from this workshop were gathered so as to help the BTA develop the spectrum licensing and pricing policy.
“We are working hard so that we can license the spectrum as soon as possible,” said Pheko.


Read this week's paper