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In an effort to conscientise the nation about the restructuring of the telecommunications sector that has recently taken place, the Privatisation Unit interviewed The acting Chief Executive Officer of Lesotho Telecommunications Authority (LTA), Mr. Thabo Khasipe, on the developments that are taking in the telecommunications sector.

Objectives of establishing LTA: The acting Chief Executive Officer of Lesotho Telecommunications Authority (LTA), Mr. Thabo Khasipe, started by explaining that the main objective of setting up the Regulatory Authority was to liberalise the telecommunications sector. Initially there was one operator that used to be Lesotho Telecommunications Corporation (LTC) which was effectively a monopoly providing fixed network telecommunications services. In the past, the Corporation played a dual role of an operator and a regulator. This meant that it was issuing licences to other players in the market and at the same time providing telecommunications services. This activity had inherent inefficiencies as LTC had the role of the referee and of the player in the regulatory arm and provision of services respectively.  Therefore the whole idea of restructuring the telecommunications sector was to split the roles of the policy, regulation and service provision with the Government taking over the policy decisions, while LTA was taking over the responsibilities of regulation. Competition would be created in providing services for the public.

Now the regulator has the mandate of being the overseer of Government Policy and developing the sector through implementing the Lesotho Telecommunication Authority Act of 2000. The regulator has to basically interpret the Act and make sure issues of universal access - providing telecommunication services in all corners of the country including internet access by libraries - are implemented in accordance with the Act.

Spectrum Management: The Regulator also has the responsibility of Spectrum Management - that is, allocation of radio waves. This means that for instance, Radio Lesotho would be allocated transmission on, say 92.3 MHz while People’s Choice FM Radio is allocated transmission on 96.5 MHz.

Still on the issue of Spectrum Management, Mr. Khasipe explained that Lesotho, like any other country, has been allocated a certain spectrum of airwaves to allocate in-county by the International Telecommunications Union (ITU). He emphasised that efficiency in allocating airwaves is of outmost importance as the airwaves are scarce in nature. Allocation of the spectrum of airwaves is decided at the international level under the auspices of the World Radio Conference that is held approximately every four years.

He went on to highlight that these frequencies are sound frequencies comprising low to ultra-high frequencies. Low frequencies are used for walkie-talkies, radio stations use medium waves, and ultra-high frequencies are used for voice media and video all compressed into one.

For instance, when a radio station, say Radio Lesotho, is allocated 95.6 MHz for transmission, it means they have to tune their equipment to that particular frequency. Failure to do so can result in penalties imposed by the Authority. Adherence to allocated frequencies ensures that radio transmissions do not interfere with each other

Because of the scarcity of airwaves, these airwaves are auctioned in international markets and prices can sometimes go up to billions of dollars. Now the frequency monitoring equipment, which is in the process of being purchased by LTA, will mainly monitor whether radio stations and mobile phone service providers are confined to agreed wavelengths.

At present, local mobile phone service providers are complaining that waves from South African mobile service providers are spilling over into Lesotho. Now LTA would need the monitoring equipment to produce printouts to make a case to South African regulators. SA regulators would then reprimand their operators accordingly.

Mr. Khasipe further highlighted the role of LTA as a conduit through which funds can enter into the country.

Major Challenges: “The major challenge has been stakeholders understanding the concept of a regulator, especially the staff in particular as this was a new concept in Lesotho. This included even the operators that we were regulating. This is because regulation involves divulging certain information about the operators and they generally saw us as a nuisance” he observed.

Consumers also complained that they did not understand the procedures for lodging complaints. This possibly stems from the fact Basotho have never had the culture of complaining effectively to protect their rights which includes lodging petitions as covered by the Act.  He stressed that when there are complaints in regard to poor services provided, the complaints should not just be reported in the media, but further steps should be taken as the Law provides for proper channels of lodging complaints.

He pointed out that in as much as all stakeholders are going through a learning curve, some operators it seems will need to be more flexible to adapt to the new environment.

The other challenge was that the Lesotho Utilities Reform Project was put in place to ensure that support is given the LTA during the initial two years of its operations, and there were indeed problems in the initial licensing of the operator TL that that have now been resolved.

Achievements Attained: So far the biggest achievement was seeing to the liberalisation of he telecommunication sector itself. Another mobile operator Ezicell has also been licensed which was part of the bigger agreement when LTC was being privatised. The Agreement stipulated that the buyer would be given an option to operate a mobile telephone in addition to the fixed line operations. It is indeed remarkable that the licensing of the mobile operator went very well given what normally happens in other countries. The important element that should not be overlooked here is the competition that was introduced in the mobile telephone industry. The biggest element in the competition is in the quality of service and network coverage. Both operators emphasise that their service is good which is ultimately very beneficial for the consumer.

Tariff Raise: He went to explain that in cases where the operator wanted to raise their tariffs, they should follow the procedures entailed in the Telecommunications Policy which is a public document. They are also laid down in the telecommunications rules and procedures that emanate directly from the Act. In the first place, tariffs of all operators are supposed to be regulated, especially Telecomm Lesotho since it is a monopoly created by the agreement laid down when shares in LTC were being sold to the private investor. The Agreement stipulated that TL would be given exclusivity – that is, TL would operate as a monopoly in some services - for 5 years in order for the company to be a viable business. Obviously this means that the operator has market power and there exists potential for abuse in an environment where there is no competitor undercutting the operator. The role of LTA is therefore to make sure that the operator behaves as if there is a competitor through instruments such as licensing fees and even certain incentives.

In raising tariffs there is a price cap formula that is used for the initial two years that includes variables such as the price factor, productivity of the company and so on. In the long term, the models that will be used are those that simulate competitive markets. In a nutshell, when the operator wants to raise tariffs, it has to be determined that the proposal that will be tabled should comply with the price cap formula. At the same time, the proposed new tariffs will be publicised for the public to make comments.

Complaints by Telebureau Operators: Commenting on the public hearing held on 7^th March 2002 that was that was chaired by the Board of Lesotho Telecommunication Authority in a dispute between Lesotho Public Phones Operators (LPPO) and Franchise Development Management (FDM), Mr. Khasipe pointed out that telebureaus had been identified by LTA exclusively for Basotho entrepreneurs.  FDM came into the market with telebureaus and were challenged by Basotho Public Phones Operators. During the hearing, it became apparent that FDM was not just a telebureau operator, but were willing to provide value-added services such as the Internet.

The Board of the LTA took the decision that FDM should continue to provide the services under the franchise model simply because they were going to provide more than just voice. FDM also provided evidence to the fact that the telebureau they were operating belonged to Basotho. But subsequently the Board decision was challenged by the telebureau operators on the basis that FDM is owned by foreigners and Basotho who are supposed to be owners are just posing as a corporate front veil. FDM has since disappeared following the investigations.

Tabling Complaints: Essentially there is a procedure to be followed in cases where there are complaints to be tabled before LTA. A letter first has to be written by the complainant to the defendant. In case the defendant does not respond, the letter will be followed by the complainant approaching LTA with the correspondence showing that the complainant had complained to the defendant. LTA will then take over the case.

Capacity Building: the staff of LTA has been attended workshops to build capacity on the operations of a regulator. The training workshops were useful as the staff was coming with varied skills from their respective fields. The workshops helped to build exposure to the relevant issues inherent to the regulator and so gain understanding of what is a frequency spectrum, an operator mobile or fixed network and a satellite network.

Building Relations with Operators: operators are engaged on an on-going dialogue through committees on standards and rollout targets to be attained by the operators.

With the introduction of the new operator into the market, LTA is currently being confronted with issues that are competitive in nature. Some of these issues are convergence issues where it is becoming increasingly difficult to differentiate between a fixed network and a mobile operator. For instance the telephone instruments that are currently being installed by TL are wireless, yet TL is a fixed network operator. At the same time, there is a service that has just been launched at Ha Leqele called a local loop, whereby an antenna is installed at ha Leqele instead of cables being laid from the exchange to the area. The attennae then beams the signal to the surrounding area.

To conclude, Mr. Khasipe admitted that the picture is becoming a bit blurred in terms of the boundaries between the services provided by the mobile operator and the fixed network operator. But the most important thing is that LTA is engaging the operators in a continuous dialogue so as to facilitate the smooth roll out of services to the nation. 

Makalo Ntŝasa

Senior Information Officer

Privatisation Unit