YOU ARE AT:Archived ArticlesCELLULAR SERVICE REACHES BOTSWANA

CELLULAR SERVICE REACHES BOTSWANA

JOHANNESBURG, South Africa-The long-awaited launch of cellular service in Botswana is expected to have a huge impact on the country’s communications and business sector.

Botswana’s small population of 1.47 million people was seen as a main reason for the delay. Proposals for cellular can be traced back to 1991, but it wasn’t until 1997 that tenders were issued.

Not that Botswana has lagged behind in the telecommunications field. Unlike many developing countries, it long has enjoyed a reliable and sophisticated telecommunications network, which-with an investment of more than US$250 million by Botswana Telecommunications Corp. (BTC)-includes fiber-optic technology.

With a total GDP (gross domestic product) of about US$4.3 billion, Botswana is regarded as one of the most prosperous economies on the African continent. The United Nations 1997 Human Development Report rates the country third among sub-Saharan African countries, after Mauritius and South Africa.

The Botswana Telecommunications Authority (BTA) was formed on 20 December, 1996. In addition to building an organization from scratch, the BTA embarked on the major exercise of preparing the mobile services tender process. The tender invitation was released on 12 May, 1997.

The tender aroused considerable interest, and 21 tender documents were purchased. By the closing date of the tender, 12 August, five tenders were received and opened in public. The evaluation process began immediately, and between 22 and 24 October, 1997, all five tenderers were invited to make their tender presentations to the BTA board. Following these presentations, the board short-listed Botswana Vodacom Cellular (BVC), Mascom Wireless (Pty) Ltd. and Vista Cellular (Pty) Ltd.

The BTA board subsequently awarded the two GSM (Global System for Mobile communications) licenses to Mascom and Vista on 17 December, 1997.

C.M. Lekaukau, executive chairman of BTA, hailed the award to Mascom as a “historic event which will go down into the annals of the telecommunications history in Botswana, signifying the starting of the new liberalization policy by the young Botswana Telecommunications Authority set up in December 1996 to stimulate competition in this sector.”

The awarding of the two licenses, however, was shrouded with controversy. The elimination of BVC, which included South African operator Vodacom, resulted in heated debate. Reports in the local media questioned the “ethics and impartiality” in the choice.

A report in the Botswana Mirror early this year said comments against BVC stated that by selecting the company, “Botswana would become a tenth province of South Africa.”

“With the exit of BVC, Botswana has lost its only opportunity of having a publicly owned communications company with advanced technology,” said the report. “More and probably the most important, is that [BVC was] the only company to offer subsidised telephones.”

The BTA Board, however, defended its decision. In a public statement, the board’s final decision to award the two licenses to Mascom and Vista was “an informed one,” and members were convinced “beyond any shadow of doubt that the executive chairman, his staff and various reputable consultants based in Botswana, South Africa and the United Kingdom have been transparent and above reproach.”

Mascom Wireless shareholders are Portugal Telecom, TS Masiyiwa Holdings of Zimbabwe and DECI Holdings, which is owned by a group of Botswana entrepreneurs. TS Masiyiwa won the bid for the second cellular license (Econet) in Zimbabwe after extensive legal challenges against the Zimbabwean government.

Vista Cellular is a consortium of companies comprising FCR, a wholly owned subsidiary of France Telecom, plus a group of wholly owned citizen companies. FCR manages all France Telecom’s GSM African operations, including in Cote d’Ivoire (Ivory Coast).

Mascom Wireless launched service on a limited basis in time for U.S. President Bill Clinton’s visit to Botswana at the end of March and launched it commercially in mid-April in the capital city of Gabarone, followed by the country’s second city of Francistown in the north. Continued roll-out of services is expected over the next few months to the rest of the sparsely populated country.

Mascom awarded the US$10 million turnkey network contract to L.M. Ericsson. To date, Mascom has commissioned 12 GSM sites, and cellular services are available in Gabarone, with one site each commissioned in Francistown, Lobatse, Mochudi, Dibete, Mahalapye, Palapye, Kasane, Selebi-Phikwe and Tonota.

Vista launched commercial operation at the end of May, with Ericsson supplying about US$7 million worth of GSM equipment. Vista services currently are only available in Gabarone and Francistown.

Although authorities report that relatively good progress has been made in the network roll-out, this has not been achieved without problems. Both networks have encountered difficulties in securing transmission capacity and electrical power. This mainly has affected Mascom as the company operates under a tighter schedule than Vista.

Both operators now are signing up customers and providing basic voice services. Enhanced services, including facsimile and prepaid, are planned for later this year.

The major outstanding issue to be resolved is an interconnect agreement between all licensed operators. Commercial agreements between the cellular operators as well as between the cellular operators and BTC have been negotiated for quite some time without success, and there is an attempt to declare a dispute and have BTA resolve the issue.

Cellular implementation overall is making steady progress. The service providers anticipate a total of 120,000 subscribers within 10 years, but many fear these estimates may be too high. But if the intensive marketing drives both Vista and Mascom have launched are anything to go by, the companies are serious about their forecasts; almost overnight they have become Botswana’s largest advertising accounts.

Initial subscriber numbers for the two carriers were not available at Global Wireless press time.

ABOUT AUTHOR

Editorial Reports

White Papers

Webinars

Featured Content