A key component of local mobile tariffs will drop by 41% on June 1, after the Botswana Communications Regulatory Authority (BOCRA) won a bitter legal battle with Mascom, the country's largest mobile carrier.
On Tuesday, High Court judge, Michael Leburu ruled against Mascom’s application which sought to stop BOCRA from cutting the Mobile Termination Rate to 13 thebe on June 1. Known as the MTR, the rate is cost that mobile operators charge each other for voice calls that terminate in their respective networks. Essentially, the MTR involves the cost of calling from one network to another. Such calls attract the highest domestic charges and are the most frequent in the local market.
Mascom brought the urgent suit against the regulator last June, after BOCRA issued a directive to cut the MTR from nearly 30 thebe, to 22 thebe from June 1, 2017, then 13 thebe from June 1, 2018.
The pricing and cost model developed in collaboration with the three mobile networks and approved by the BOCRA board, also states that the cost of calls within and between Mascom, Orange and beMobile will be the same from June 1, at wholesale level.
At retail level, the different networks have different mark ups and costings.
In its suit, Mascom said the envisioned tariffs were “too low,” and also accused BOCRA of acting “illegally, irrationally and irregularly”. The mobile carrier said consultations with BOCRA over the key rate had agreed on a three-year glide-path to cut the MTR, but the regulator’s board had unanimously decided on a two-year period at the last minute without involving the networks.
The consultations between BOCRA and the networks took over 14-months, which Leburu said showed the regulator’s commitment
Mascom also raised numerous complaints about the consultation process itself in what Leburu described as “sharp-pointed arsenal”. Orange and beMobile filed papers to say they would abide by the court’s decision and did not actively participate in the matter.
In his judgement, Leburu said Mascom failed to prove its case, while BOCRA was clearly acting within its legislative mandate of protecting consumers’ interests.
“In my view, this is a decision of a reasonable regulator which took into account, in a fair and transparent manner, all the relevant considerations in terms of the Act,” he said.
“By reducing the said glide-path, BOCRA not only considered the foregone or lost revenue to Mascom.
It also considered that it will suffer financial loss arising from regulatory fees payable by operators but was swayed primarily by the interests of consumers.”
Leburu continued: “This court, even assuming that it may have erred in its final conclusion (which is stoutly not conceded), this is an exceptional case in which the decisions and actions of BOCRA should stand, as I hereby hold, based on public interest imperatives relating to reduction of the prices and/or tariffs relating to interconnection prices”.
Legal sources close to the matter yesterday told Mmegi that Mascom was already preparing its appeal.
“They have said they will appeal the matter, but BOCRA is pushing ahead and on June 1, those reductions as contained in the directive will take place,” said an insider who declined to be named for professional reasons.