Lesotho’s regulator opens up market to other operators

Lesotho’s regulator opens up market to other operators

Until late 2020, Lesotho’s telecom regulator maintained a market duopoly between the privatised national operator, Econet Telecom Lesotho (ETL), which is focussed on fixed-line services, and Vodacom Lesotho, which dominates the mobile sector.

Competition between the two was insufficient to promote effective price reductions for consumers, while the regulator had no mechanisms in place to monitor the telcos to ensure quality of service and fair pricing for consumers. The small size of the country’s population provided little incentive for new players to enter the market.

Legal wrangling between the regulator and the telcos are ongoing. Both telcos were fined in late 2020, though Vodacom has the more troubled relationship with the regulator. This culminated in the regulator having attempted to revoke Vodacom Lesotho’s operating licence, a process which was temporarily suspended by the Supreme Court after the company appealed. A positive outcome for consumers was the deployment in early 2021 of a service to monitor traffic and billing. This ended the practice whereby the regulator was dependent on telcos submitting data about their performance, billing, and other matters.

Vodacom was the first operator to introduce mobile broadband services in the country, supplemented with a WiMAX network. In late 2014 the company launched commercial services based on LTE technology. This was followed by fixed-wireless 5G trials in early 2019 based on a trial 3.5GHz licence. Vodacom Lesotho was among the first network operators in the region to conduct such trials.

BuddeComm notes that the outbreak of the pandemic continues to have a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure.

Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key developments:

  • Vodacom Lesotho transfers its M-Pesa division to a new independent company, VCL Financial Services;
  • Telecom regulator assumes the right to approve telcos’ senior management appointees;
  • ETL expands FttP network;
  • Safaricom and Vodacom Group acquire the M-Pesa brand;
  • Improved internet connectivity following landing of international cables;
  • Universal Service Agency expanding base tower infrastructure in remote areas;
  • Report update includes ITU statistics, regulator’s ICT market report, Telecom Maturity Index charts and analyses, operator data to Q2 2021, assessment of the global impact of Covid-19 on the telecoms sector, recent market developments.

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Developing Telecoms market report summaries are produced in partnership with BuddeCom, the world’s largest continually updated online telecommunications research service.

The above article is a summary of the following BuddeCom report:

Report title: Lesotho - Telecoms, Mobile and Broadband - Statistics and Analyses

Edition: November 2021

Analysts: Henry Lancaster

Number of pages: 104

Companies mentioned in the report: Telecom Lesotho, Econet a, Vodacom Lesotho, Eskom, Comnet

Single User PDF Licence Price: US$890

For more information or to purchase a copy of the full report please use the following link: https://www.budde.com.au/Research/Lesotho-Telecoms-Mobile-and-Broadband-Statistics-and-Analyses/?r=83