BOCRA finds BTCL guilty of breaching licence
Mbongeni Mguni | Monday August 23, 2021 13:33
BOCRA has given the BTCL 30 days to rectify the issue failing which the telecomms group faces a hefty penalty.
In a ruling released today, BOCRA found that BTCL had breached its own licence conditions which compel it to provide the high speed internet produce, known as Very High-Speed Digital Subscriber Line (VDSL) to local Internet Service Providers (ISPs) with which it has agreements. VDSL offers Internet access at up to 50 megabits per second, compared to the widely used Asymmetric Digital Subscriber Line (ADSL) technology which offers a maximum of four megabits per second.
ISPs purchase wholesale data products from BTCL and sell these to their own retail customers, but the telecomms giant also has its own retail customers and thus competes with the ISPs as well.
Local ISP, Inq. Digital, formerly known as Virtual Business Network Services, filed a complaint with BOCRA alleging that BTCL was charging predatory and excessive prices on its wholesale ADSL offering and was also refusing to provide ISPs with the better VDSL technology, while providing the same to its own retail customers.
BTCL executives had said the decision to not provide wholesale VDSL to ISPs was a business strategy taken in line with a decision to phase out the group’s wholesale business.
However, after reviewing written and oral submissions from both parties, which dragged on earlier this year due to delays by BTCL in providing requested information, BOCRA found that the telecomms group was still taking on new wholesale customers and was in fact providing VDSL to its own retail clients.
“The Respondent (BTCL) has accepted that one of its retail customers enjoys a rather high discount for high-speed internet service they call corporate internet,” BOCRA board secretary, Joyce Isa-Molwane said in the ruling. “The discount, which by the Respondent’s admission, is below the cost price, was offered to retain such customer from moving its business to the competition.”
Inq. Digital accused BTCL of providing VDSL to the retail client at a price 34% above the wholesale ADSL price given to Inq. Digital, despite ADSL being an inferior technology to VDSL and despite wholesale prices generally being lower than retail prices.
BOCRA found that the BTCL’s justification of the situation was untenable and amounted to a breach of its licence.
“For so long as the services remains available to its own business, the Respondent is directed to therefore offer the same service on the same prices, processes and terms to the Complainant (and any other licensed operator) without favour for its own businesses,” the regulator said. “The Respondent should offer the services to the Complainant within 30 days from receipt of this ruling in accordance with the wholesale tariffs approved by the Authority.”
BTCL has also been warned to adhere to the ruling and the deadlines or face a “civil penalty” from BOCRA. BOCRA did not make any finding on the allegations of predatory pricing and instead referred the complaints to the Competition and Consumer Authority.
The ruling is seen as critical in levelling the playing field in terms of Internet provision, pricing and competition among providers in the country. Both parties are allowed to appeal the ruling.