Wednesday, May 18, 2022

Reduced calls rates to encourage growth in telecommunications sector

Although the call rates within local telecommunications networks were reduced by 25 percent, Botswana’s rates still won’t be rated amongst the lowest in the Sub-region.

Earlier this year, the Botswana Telecommunications Authority (BTA) issued a directive for operating networks to reduce their rates. After conducting a study in 2010, the Authority directed new pricing development in the telecommunications industry.

The directive was specifically meant to explicitly focus on fixed termination and mobile termination rates. The spokesperson for the BTA, Aaron Nyelese, had explained before that the directive did not necessarily mean that the BTA would make losses.

Nyelese said that people are taking a simplistic approach when they assume that the reduced rates will have a negative impact on the country’s three existing networks: BTC, Orange and Mascom.
He said that they expect traffic to grow because cheaper prices for calls means more people will afford to use the networks. He said that it makes sense to assume that people would want to buy into networks when given a chance to call for less.

“For now, we can’t tell the impact that the reduced rates have had on the mobile networks but looking at the issue from a demand and supply angle we expect the networks to grow,” said Nyelese.

Another country that has pulled a move similar to Botswana is Mauritius, which revealed recently that it has slashed telephone interconnection charges on the Indian Ocean Island by 33 percent from July 1, to boost the number of users.

The move cuts tariffs on calls from a fixed line to a mobile line and from a mobile to another mobile on a different network, the Mauritian government said in a statement.

With a population of 1.3 million people, Mauritius counts more than 1.2 million sim card subscriptions and the government believes there is room for more growth.

Mauritius Telecom, which dominates the fixed line and mobile markets as well as providing an internet service, last month posted a 17 percent rise in pre-tax profit on the back of a higher contribution from the mobile market.

Meanwhile Kenya has earlier this year been named as the country providing the cheapest mobile services in Africa according to the Daily Nation.

The east African country introduced low mobile termination rates in August; Kenya surpasses Tanzania, which is rated number two in their region.

Meanwhile in Southern Africa, Angola and Zambia are said to be amongst the countries with the highest call tariffs in the region.

South Africa, a key market in the telecommunications sector, has some of the highest numbers of subscriptions and has higher calling rates when compared to countries in the East Africa region.

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