Telecoms sector needs better regulation

This year the Lesotho Communications Authority (LCA) issued an invitation to tender for the supply of a compliance monitoring and revenue assurance system. It aims to implement a technology-based revenue-assurance solution that enables both operators and the regulatory authority to optimise revenues and ensure greater inclusion and market growth in Lesotho’s telecoms sector. The telecoms sector in Lesotho is highly concentrated, with a privatised national operator, Econet Telecom Lesotho (ETL) dominating the fixed-line market. The mobile market is a duopoly between South Africa-based Vodacom (with 80% market share) and ETL. Although both companies have made significant investments in network extension, supported by a dedicated Universal Service Fund (USF) — established by the Lesotho Communications Authority (LCA) in 2009 to foster greater inclusion – these efforts have fallen short. Competition is insufficient and current prices are unaffordable for many Basotho. Added to this mobile penetration remains below the regional average, and the small size of the market provides little incentive for new entrants. According to Research ICT Africa (RIA), demand-side trends in Lesotho’s ICT sector showed that of people with a mobile phone, 46% have a smartphone, and a much smaller number of people in rural areas own a smartphone. Digital inequality is increasing as an urban elite benefit from being online. At the same time, most of the population are left offline, or only able to be online intermittently and for short periods due to the relatively high cost of communications for them. To tackle these challenges, the LCA recently issued an RFP for the design, supply and implementation of a compliance monitoring and revenue assurance system so that it can better regulate the telecoms sector. Lesotho is not alone; the boom in mobile telephony across Africa has challenged several governments and regulatory agencies. Like most African countries, Lesotho still relies on a self-declaratory system to oversee the telecoms sector. However, this leaves loopholes – encouraging scams and fraudulent activities, decreasing a regulator’s ability to collect revenue owed to it. However, with the correct tools, the LCA will have full visibility of the sector. First there is a unified gateway – a single entry and exit point for all telecoms traffic – which enables full visibility on telecoms traffic. This solution means regulators can measure the exact volume of telecom transactions that are subject to taxes and regulatory fees. Secondly, a proactive technology-based revenue-assurance solution is needed. This solution allows both the operators and regulatory bodies to optimise revenues, by plugging revenue leakage, reducing fraud on international calls and controlling the network quality and integrity. These technology-based solutions allow for data-driven regulation, and effective and efficient collection, consolidation and processing of all data relating to the sale of telecommunications products and services. Regulatory authorities gain full visibility of revenues generated by all transactions relating to fixed-line, mobile and internet telecommunications. Which means it can optimise the collection of surcharges, taxes, levies or any other contributions due to it. Therefore, the importance of what the LCA is aiming to achieve through its RFP cannot be overemphasised. In essence, the successful implementation of a compliance monitoring and revenue assurance system will give Lesotho the means to set itself solidly on the path towards sustained economic growth. l Suzette Plantema is a communication specialist and has a lively interest in the world around her – she has been a passionate writer for almost 30 years and is particularly interested in the telecommunications sector and its impact on African economies Suzette Plantema