LCA ends Vodacom, Econet duopoly

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Ntsebeng Motsoeli

THE Lesotho Communications Authority (LCA) has ended Vodacom Lesotho and Econet Telecom Lesotho’s duopoly by amending the regulations to allow more players into the mobile communications industry.

In the past, companies had to wait for the LCA to issue an invitation for them to apply for licences but the invitations never came enabling Vodacom and Econet to enjoy a duopoly in the sector for more than a decade. Vodacom was the first to be licenced in 1996 and Econet followed suit in 2008.

But their stranglehold on the sector is set to end after the LCA yesterday it had amended the regulations to allow more players.

Addressing the media at the LCA headquarters in Maseru, the authority’s chief executive officer (CEO), ‘Mamarame Matela, they had amended the LCA regulations to enable applicants to apply for licences for a fee of M200 000.

“The new LCA (Administrative Amendment) Rules remove the requirement for applications only after prior invitation and introduces application for all licences on a first come first served basis in accordance with a parliamentary directive of 11 November 2019,” Ms Matela said.

“The impact of these rules is that any prospective applicant can submit an application that meets the prescribed requirements together with payment of application fees to obtain a unified licence to operate in Lesotho.”

A unified licence allows the holder to provide a variety of services including voice, financial, data and video content.

Ms Matela was quick to point out that the move was not aimed at replacing Vodacom and Econet.

The two companies have had run-ins with the LCA over various alleged infractions.

Vodacom is currently locked in a legal battle with the authority over its 8 October 2020 decision to revoke the latter’s operating licence.

The LCA issued a notice to revoke Vodacom’s licence on 8 October after the company failed to pay a M40, 2 million imposed on it for allegedly violating its licensing regulations by among other things “submitting audited financial statements that were unaccompanied by a certification issued by an independent external auditor”.

This prompted Vodacom to file an urgent High Court application for an interim order which was duly granted by Justice Thamsanqa Nomngcongo paving the way for the company to continue providing services until its application for a final order against the decision to revoke its licence is heard by Justice Keketso Moahloli on 27 November 2020.

The LCA board chairperson, Ms Matela and the LCA are first to third respondents respectively in the application.

Econet on the other hand was fined M1, 5 million for the late submission of its licence renewal application. It has since paid the fine.

However, Ms Matela said the amendment of the regulations was not aimed at punishing the two companies after they fell afoul of the authority.

“Our work as the LCA is very clear. Where there is noncompliance, there are specific provisions as to how we treat those. It just happens that the manner in which Vodacom has been behaving has led them to where they are right now. “But I want to reiterate, it is not in our interest for Vodacom to leave the country. However, they must show commitment towards complying with relevant licence conditions and laws,” Ms Matela said.

She said there was no limit to the number of companies that can apply and anyone who meets the requirements can enter the mobile communications market and compete.

LCA manager for licensing and compliance, Tankiso Mohobo, said, “an applicant must have financial and technical capabilities to own and construct a network that will efficiently provide services to the Basotho nation”.

“International companies are welcome to apply but should establish a company that is registered in Lesotho. A prospective applicant will have to submit a business plan or proposal where they can motivate their application,” Mr Mohobo said, adding the processing of the licence can take up to nine months.

He said licences can be revoked if the licensee does not provide services within two years of being awarded a license.

The authority also issued a statement, saying, “as we commemorate 20 years of existence and chart the way forward into the next 20 years marked by a digitally empowered nation, the authority invites Basotho to take advantage of the opportunity presented by this transformation of policy brought about by parliament to stimulate fair competition, economic growth and prosperity”.

The full list of requirements for a unified licence is as follows:

  • Company profile listing all directors, their addresses and their equity holdings as well as certified copies of passports of the directors.
  • Their contact details.
  • A business plan.
  • Description of service to be provided.
  • Network configuration details.
  • Proposed management structure.
  • Curriculum vitae for key personnel.
  • System capacity and breakdown of initial capital investment, level of charges and estimated annual revenue and operating costs.
  • Sufficient documentary evidence to prove that the applicant has the financial capability to meet the capital investment required in the financial plan.
  • Previous experience in the establishment and operation of the service proposed.
  • Applications can be submitted in person or by mail to LCA. Applications carry fees and these fees must be paid upon application.

 

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