ECONET TELECOM (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES

Table of Contents 1. About Econet Telecom Lesotho...... 2 1.1. Company Background ...... 2 1.2. Vision and Mission ...... 3 2 ETL Fixed Telephony Background ...... 3 3 ETL Mobile Telephony Background ...... 3 4 Mobile Financial Services ...... 4 5 Corporate Social Investment (CSI) ...... 4 6 Motivation for Operating Licence Renewal ...... 5

6.1 The legal position on Econet Telecom Lesotho Licences ...... 5 i. Performance over the Licence Period - 2000 TO 2019 ...... 5 a) The Market, Subscribers and presence...... 5 b) Subscriber Benefits on Pricing ...... 8 c) Innovation ...... 10 ii. Compliance over the licence Period ...... 11 iii. Contribution to Lesotho’s socio-economic development ...... 11 a) Empowerment initiatives ...... 12 b) Government & Business Support Systems ...... 12 c) Employment Creation and Skills Development ...... 13

iv. Corporate Social Investment ...... 13 a) Education ...... 13 b) Health ...... 15

c) Leadership & Lifelong Development ...... 15

d) Girls Empowerment ...... 15 e) Sports...... 16 f) Social Support ...... 16

6.2 Future Corporate Social Investment Undertakings ………………………………………………………………………….… 16 6.3 Technology ...... 18 6.4 Performance on Conditions of the current unified Licence …………………………………………………………………23

7 Requested Consideration and Approval ...... 24 8 Annexures ……………………………..……………………………………………………………………………………………………………..25

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES

1. About Econet Telecom Lesotho

1.1. Company Background

The company started operations in the late sixties as a Government Department under the Ministry of Transport, Post and Telecommunications. The Telecommunications unit was converted into a specialized Telecommunications Service Provider through enactment of the Telecommunications Act of 1979 in terms of which the regulatory and operational functions of the telecommunications sector were managed by the Lesotho Telecommunications Corporation, a Government Parastatal wholly owned by the Government of Lesotho. As part of the Government divestiture process, the regulatory and the operational functions were separated in 2000 resulting in the establishment of Lesotho Telecommunications Authority as the Regulatory Agency and Telecom Lesotho as the service providing entity. Private sector participation was introduced in 2000 through the sale of 70% shareholding in this entity to a consortium named Mountain Communications (MKC) in 2000. The consortium comprised of Telecom, Eskom Enterprises and Econet Wireless Global.

Telecom Lesotho was the Fixed Network Services Provider licenced in 2000 and was also given the right to establish an independent mobile subsidiary Econet Ezi-Cel which was licenced in 2001 as a 2nd mobile operator in Lesotho. The two licences for Fixed and Mobile Services subsist to date and are operated under the single entity named Econet Telecom Lesotho (ETL) that came into being following the merger between Telecom Lesotho (TL) and Econet Ezi-Cel Lesotho in April 2008.

Eskom Enterprises owned 68% shares in MKC with EWIG holding 2%. This position changed in 2008 when EWI bought out Eskom enterprises and became the 70% shareholder in ETL and the Government retaining 30% shares. In 2009 MKC transferred 3.5% shares to the Employee share ownership scheme. The share transfer has not been registered to date and the scheme is not yet operational.

The merger of the two companies allowed ETL to provide both fixed and mobile services under separate licences operated by a single entity. The main benefit of this merger is that ETL is now able to offer customers totally converged communications solutions for fixed and mobile voice, as well as internet and data needs.

The merger has also enabled ETL to improve customer satisfaction by offering the latest technological services at competitive rates, and to attract new subscribers with innovative product offerings. ETL started providing Internet to customers in the 90s and has kept up with latest technologies so as to provide world class service to Lesotho public at large.

ETL introduced fibre connectivity in 2010 which covers majority of government ministries and departmental connections, banking services across all banks, major corporates and a sizeable amount of SMMEs. It also provides connectivity of Point-to-Point and Dedicated Internet services to majority of Non-Governmental Organisations.

1.2. Vision and Mission

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ETL’s Vision is to serve by pioneering, developing and sustaining reliable, efficient and high quality telecommunications of uncompromising world class standards and ethics. The Mission is to provide international standard telecommunication services to all the people of Lesotho.

2 ETL Fixed Telephony Background While the company ETL started to operate fixed voice telephone network since 1967 as postal and telecommunication organisation, it was 1st licenced as a Fixed Line service provider in 2001. It was the 1st fixed line services provider and had the sole rights of access to the international gateway for the country. It introduced internet services through Asymmetric Digital Subscriber Line (ADSL), which was rolled out throughout the kingdom covering major towns and intermediate towns.

It further provides Dedicated Internet services for large corporates. This also included point-to-point connectivity between offices. It rolled out its fibre network which covered mostly government ministries and its own network backbone – this was further extended to corporate organisations. Additional services of Fibre-to- the-homes (FTTH) were introduced in 2015. This replaced existing aged copper services to homes and offices.

3 ETL Mobile Telephony Background Econet Ezi-Cel Lesotho (EEL) was registered in the Kingdom of Lesotho in 2001 as part of a wholly owned subsidiary of Telecom Lesotho. This was changed as a result of the merger in 2008 for the fixed and mobile entities of Econet.

With the acquisition by Econet Wireless of the majority shareholding in ETL, the company became a related party to a number of Econet Wireless International (EWI) trading entities which include Econet Wireless , Econet Wireless (EWZ), Econet Media a player under the brand name Kwese in the broadcasting field, Liquid Telecoms an undersea cable and international bandwidth provider across Africa, Econet Burundi and Africa Data Centres.

The company introduced CDMA technology, to cover areas where the fixed telephone network could not provide coverage. It has 2G, 3G and 4G/LTE technologies within its network. 3G and 4G/LTE further improved the data network to accommodate emerging technologies. Connectivity backhauling has been vastly covered by Fibre-Optic Cabling (FOC) to improve transmission from previous outdated technologies. For secure connections, ETL provides Private APN service for mobile users.

The most recent improvements on our network launched in March 2019 was the Transmission and Core Network modernization coupled with the Business Systems Support revamp that has enabled a full cloud based elastic 5G ready core network that support fast data services like VoLTE and VoWifi.

4 Mobile Financial Services

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ETL was the 1st Mobile Network operator to launch mobile financial services in 2012 through the partnership with a local Bank which was the licenced financial services provider in the country. These were initially offered locally to subscribers of ETL but have since been opened up to competitor subscribers. In 2013 the company introduced a Life Assurance product in partnership with a local insurance Company under the brand name EcoSure that is operational to date providing life cover.

Mobile financial services provided by the company include Bulk payments for disbursements of social grants for many customers comprised of companies, agencies and Government ministries.

Further innovations in the services were introduced in 2016 with international partners. This service catered for remittances from the UK, US, Netherlands, Hong Kong, United Arab Emirates and South Africa.

5 Corporate Social Investment (CSI)

ETL operates a CSI contribution within the country through the Higher Life Foundation which supports various initiatives that are aimed at providing access to and improving the quality of education, while providing leadership training and lifelong development to help young people thrive and emerge as the next generation of Africa’s leaders. This foundation is funded through a pre-defined annual percentage of the revenue generated by the company. A list of beneficiaries is hereby attached as Annexure 1.

6 Motivation for Operating Licence Renewal

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES

6.1 The legal position on Econet Telecom Lesotho Licences

The Fixed Network Operating Licence expires on 1 November 2020 and the Mobile Operating Licence of Telecom Mobile expires in 11 October 2021. ETL applied for a unified licence through its letter dated 29 November 2017 and the Authority subsequently approved the same through its letter dated 15 January 2018.

In terms of the provisions of the Lesotho Communications (LCA) (Administrative) Rules 2016, Rule 6(2) (a), a Licencee is required to submit an application for renewal to the Authority not less than 2 years prior to expiry of the licence. In addition, the rules specify information to be incorporated in the justification for renewal, the details of which are as provided in this motivation.

i. Performance over the Licence Period - 2000 TO 2019

A summary on the innovation milestones introduced by ETL since it was first licenced in 2000 is as outlined hereunder.

Achievements on the key milestones and respective contribution of the company to the sector are as detailed below a) The Market, Subscribers and presence.

Over the operating period contribution to the market shares of ETL across the various mobile and fixed technology services are as reflected in graphs below.

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Mobile Market share Total 40.00%

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 1. Econet Total Market Share GSMA Intelligence

Market share Prepaid 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 2 Econet Market Share Prepaid Subscribers (GSMA Intelligence)

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Market share Contract

50.00%

40.00%

30.00%

20.00%

10.00%

0.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 3 - Econet Market Share Contract Subscribers (GSMA Intelligence)

Market share 2G 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 4 - Econet Market Share 2G (GSMA Intelligence)

Market share 3G 40.00%

30.00%

20.00%

10.00%

0.00% 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 5 - Econet Market Share 3G (GSMA Intelligence)

Figure 6 – Econet Market Share 4G (GSMA Intelligence)

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES

Lesotho Fixed Broadband Subscribers 7000

6000

5000

4000

3000

2000

1000

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 7 Source: World Bank Since commencement of the licenced operations, despite ETL being a 2nd entrant in the GSM market it has continued to maintain consistent share of the market across the various technologies and services. The business introduced 3G in 2008 and 4G/LTE in 2015 offering customers latest mobile technologies to improve user experience. The business upgraded the fixed copper network to ADSL and ADSL+ in 2007 and later in 2014 introduced fibre to the home and business (FTTx) replacing the ailing and vandalism prone copper, providing the fastest and stable broadband. These improved offerings resulted in the consumer realising the benefit of a competitive broadband experience in the communications service industry. b) Subscriber Benefits on Pricing

Despite the increased cost of doing business which has been on an upward trajectory over the years, e.g. labour, transport, technology support, finance costs, VAT, regulatory fees, electricity etc., the company has consistently devised innovative measures to reduce tariffs to an affordable level. These include a variety of initiatives such as bundled offerings, Dynamic Tariffing, giveaways, calling and data bundles, promotions e.g. Nchoathi, Babatone Dark, Ponto etc. For the latter years of the licenced operations significant changes to the data tariffs show customers paying less and less on a per MB basis.

Table 1: Effective Tariff Data (M) FY13 FY14 FY15 FY16 FY17 FY18 FY19

0.28/MB 0.16 /MB 0.18 /MB 0.10 /MB 0.07/MB 0.05 /MB 0.04 /MB

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Table 2: Econet Telecom Lesotho Effective Call Tariff Trends FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 GSM 1.65 2.25 1.97 1.31 1.04 0.75 0.54 0.71 0.37 Fixed 1.33 1.63 1.61 1.43 1.04 1.00 1.17 1.32 1.49

The trend on data tariffs shows continuing price reductions to the benefit of the consumers. This trend is validated by independent analysis by researchers such as Research ICT Africa. Their findings confirm that while at inception data services costs in Lesotho were among the highest in the SADC region; over latter years, the data tariffs compare favourably to those in South Africa and other SADC countries. This was achieved as a result of available spectrum, innovation, investment in newer technologies and increased penetration. The company has designed a product namely Econet Zero that allowed free access to local and international educational content, government and educational institutions’ websites. With regard to voice tariffs the trend shows a decline in effective tariffs over the mobile network while the fixed line tariff performance has not been consistent in that it showed an upward trend for the years 2011 and 2012 as well as in the latter two complete years of operation. This was affected by an increase in VAT and the behavioural calling patterns which showed an increase in international calls from fixed business, this owes its basis to the prevalence of mobile telephony which is mostly used for local calls. The findings from ICT Africa as depicted in the graphs below show the trends for voice, pricing per 1GB basket for communication services within SADC. This shows that the price for voice and data in Lesotho are amongst the lowest in SADC.

Figure 8: Africa - Cheapest Mobile Prepaid Voice Product 30.00

25.00

20.00

15.00

10.00

5.00

0.00

2014 Q4 2014 Q1 2019 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q2 2019 AngolaQ1 2011 Comoros D.R Congo Swaziland Lesotho Madagascar Mauritius Mozambique Nigeria

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60 Figure 9: SADC - Cheapest price for 1GB

40

20

0 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Angola Comoros D.R Congo Swaziland () Lesotho Madagascar Malawi Mauritius Mozambique Namibia South Africa c) Innovation

ETL has played a lead role in innovative solutions in the market. It was the 1st communications service provider to launch Mobile Financial Services (MFS), international mobile money remittances (in-bound), as well as bank to wallet services. Mobile financial services brought convenience to Basotho as they are now able to buy electricity, pay water bills, pay ground rent and pay for insurance premiums and other services from the comfort of their homes. Furthermore, ETL’s flagship mobile money service platform enables disbursements of social grants and wages to beneficiaries of Government and Non-Governmental Organisations. This heralded the new wave of a number of new players from the banking sector introducing their mobile financial services. This addresses the Government’s call for financial inclusivity and offers Basotho easy access to digital payments transactions without bank accounts, convenience and choice of supplier for this essential service that has now become widely accepted as a new way of doing business. ETL also introduced mobile insurance which allows Basotho to conveniently take up insurance covers by registering through their cellphones and pay affordable premiums with airtime or EcoCash. ETL also acts as a carrier for other service providers in the media space and has sought to introduce flexible options for access to international media content. The Company provides multiple solutions to businesses over the GSM such as A2P messaging, toll free solutions and hotlines (for other entities, Insurance Providers, Utility Service Providers), support maintenance of independent Fraud management to businesses. This is in support of ethical business practices. In addition, it supports connectivity to critical business support systems inclusive of the ATM’s over the new reliable fibre optic infrastructure as well as providing redundancy platforms to mining houses. ETL has been the pioneer in terms of innovation in bringing the cost of communication down, and providing Basotho with latest technologies and services. ETL introduced unlimited voice calls (Nchoathi), unlimited Wi-Fi packages, the ability to provide unlimited instant messaging, airtime credit or advance, cheapest night data bundles and fax to email. ECONET TELECOM LESOTHO Renewal of Operating Licences 2020 (Rev.Final)

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Pursuant to improving day to day lives of Basotho ETL introduced value added services (VAS) like the traffic cameras to assist the public to plan their trips, access to examination results from primary to tertiary level, health tips, car tracking, radio station streaming, live soccer, events and music streaming. ii. Compliance over the licence Period

Econet Telecom Lesotho has during the licences period adhered to all conditions as set out in both its operating licences. There are no significant issues of non-compliance that were reported over the licences period. While we acknowledge that there have been such instances, examples of which related to delayed payment, spectrum management, tariffing and certain areas of quality of service measurements, we submit that the Company has consistently been open to engagement with the Authority for resolution of deviations from the standard to reach amicable resolution of the issues as and when they have been flagged. The Compliance Matrix is hereby attached as ANNEXURE 2 outlining the conditions as set out by the Authority in the licences issued and ETL’s level of compliance to the same.

iii. Contribution to Lesotho’s socio-economic development

Combined contribution of both the Fixed and Mobile network services operations to the country’s fiscus and the communication development goals has been significant. These are in the form of taxes, fees and investments to both the human capital and the technological infrastructure.

The following table illustrates ETL’s financial contribution to Lesotho’s socio-economic development over the licence period:

ECONET TELECOM LESOTHO (PTY) LTD – FINANCIAL CONTIBUTION 2001 TO 2020

Regulatory Fees UAF Taxes (Inc, Vat, Corp, PAYE Capex Inc) 2019/2020 20,896,148.21 5,041,064.58 17,017,434.54 7,106,984.20 2018/2019 24,745,488.90 3,360,709.72 21,657,333.44 14,046,606.70 51,491,858.00 2017/2018 21,061,997.65 2,813,082.19 11,190,581.47 15,226,833.35 32,239,709.00 2016/2017 20,745,497.66 3,333,058.62 11,502,992.48 15,330,415.36 27,519,462.00 2015/2016 21,991,901.83 2,765,151.63 11,575,308.30 16,305,934.73 206,507,020.00 2014/2015 16,925,355.20 3,191,419.56 12,228,637.59 15,130,063.18 132,638,292.00 2013/2014 20,273,102.14 3,248,700.96 28,721,799.94 15,216,901.87 42,701,960.00 2012/2013 20,405,945.52 3,537,966.66 15,302,743.76 11,853,655.17 105,092,437.00 2011/2012 20,674,725.49 2,523,410.21 11,720,027.42 15,096,340.77 58,219,649.00 2010/2011 18,328,683.00 1,981,215.00 15,748,313.95 19,410,148.00 105,071,727.00 2009/2010 13,449,134.00 2,024,147.00 13,536,629.85 20,330,130.00 219,285,990.00 2008/2009 10,546,407.00 N/A 11,403,374.60 16,538,165.00 34,036,076.00 2007/2008 10,990,859.00 N/A 9,785,202.70 15,347,166.30 2006/2007 8,997,079.00 N/A 23,046,516.25 12,547,030.80 2005/2006 10,509,397.00 N/A 7,612,746.55 11,850,423.00 2004/2005 7,591,005.00 N/A 7,853,724.00 13,590,448.20 2003/2004 7,629,817.00 N/A 6,837,930.90 12,789,981.70 2002/2003 7,725,911.00 N/A 14,728,862.70 11,025,798.00 2001/2002 7,334,642.00 N/A 14,134,066.10 9,784,858.20 20,378,361

Total 290,823,096.60 33,819,926.17 265,604,225.64 268,527,884.53 1,035,182,541.00 Notes: ECONET TELECOM LESOTHO Renewal of Operating Licences 2020 (Rev.Final)

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 Universal Access fund become operational in 2009;

The company has during the licence period made notable contribution in excess of LSL 1.8 billion in payments and investment in the economy and fiscus. a) Empowerment initiatives since the issuance of the licence.

Various initiatives have been implemented by the company for empowerment of Basotho nationals within the communications sector. These include payments and support to local suppliers which since 2011 are in excess of LSL 800 million which is inclusive of companies that ETL assisted to establish as sub-contractors for various projects for the network roll outs and maintenance services to date. It is worth mentioning that when the company franchised its business centres, franchises were given to Basotho citizens. Companies such as Ahead Technologies and others were established through collaboration of the employees who could not be absorbed into the new company in 2011 post restructuring. These companies continue to provide the necessary support for maintenance of the networks and are always trained on new technologies. ETL has paid over LSL 57 million to Ahead Technologies for their wages and operational requirements to date. Further to that we have contracted security companies with contract values in excess of LSL 80 million and LSL 18 million for cleaning companies for the current licence period . Through these contracts, ETL makes an indirect employment contribution to their employees both on our premises and offsite. All of these employees’ livelihoods are dependent on the existence of the relationship between their companies and Econet Telecom Lesotho. We have accordingly attached a list of services, supplier contracts and purchase orders. SEE ANNEXURE 3.

ETL also has a programme of dealers, containers, hawkers and Strategic Supplier Dealers (SSD’s) which today has created opportunities for 270 Basotho men and women to operate their own small businesses distributing airtime, Ecocash and other ETL products. The commissions paid out to these businesses is in excess of LSL 251 million. These business men and women have also created jobs for more than 200 Basotho. b) Government & Business Support Systems

ETL contributes to the Government of Lesotho’s financial inclusivity drive through mobile financial services; Ecocash and Ecosure. A total of LSL 6.9 billion has circulated into the economy through Ecocash transactional activities and has directly impacted over 700,000 Basotho through Ecocash and 15,000 through Ecosure who have utilised both services respectively. The business further assisted and enabled Basotho diaspora to remit over LSL 23 million since 2016 after introducing remittances from Republic of South Africa, United Kingdom, United States of America and others. Today’s modern world economy, cannot thrive without telecommunication. ETL has been at the core of Lesotho’s economic transformation as it drives the delivery of critical communication services by enabling over 3500 Lesotho businesses to evolve with the modern world economies.

ETL has invested in more than 3 000 km of fiber infrastructure across the country passing and bringing high speed internet connectivity services within reach to more than 15,000 premises. Through two decades of experience working with the local and international organizations investing in Lesotho and Basotho, ETL has worked with the spirit that recognizes that the availability of reliable broadband services is one of the most critical factors ECONET TELECOM LESOTHO Renewal of Operating Licences 2020 (Rev.Final)

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES considered by these local and international investors. ETL has demonstrated commitment to investing in the infrastructure that contributes significantly in the building of sustainable development and empowerment of Lesotho’s business sector, Government operations as well as Basotho in their areas of residence. ETL has gone and established communication services in areas where infrastructure was non-existant.

Due to its commitment to the development of the Lesotho economy, ETL effortlessly worked with the mining companies operating in the remotest mountainous areas where no one else was willing to invest. ETL has been the only communications provider over 10 years, enabling the mining sector competitiveness and operational efficiencies.

c) Employment Creation and Skills Development

ETL currently has a headcount of approximately over 500 employees, impacting over 2 500 dependants. The company has an Internship Programme, whereby top students from local Universities are engaged on a contract basis to get experiential learning across the business and these students receive monthly allowances of LSL 3,500.00 and become part of the company talent pool and some are eventually absorbed into the structure when vacancies arise. To date we have engaged more than 400 students through the Internship program.

ETL has also engaged more than 700 brand ambassadors country wide whose commission is over LSL 3 million per annum doing acquisition campaigns. Furthermore the company has engaged 114 watchmen to guard ETL towers across the country in the 10 Districts inclusive of village Chiefs, who guard ETL property and have received wages amounting to LSL 12 million to date.

iv. Corporate Social Investment since the issuance of the licence

As part of its initiatives to plough back in the communities, Econet Telecom Lesotho has over the years supported Government initiatives with regard to among others, preparing the youth for the labour market, financial support for the vulnerable members of Society for sustenance and education. Some of the specific sectors that have benefited from the Company’s Corporate Social Investment (CSI) are as detailed below:- a) Education

Royal Education Development Trust Econet Telecom Lesotho, which was then Telecom Lesotho, is the 1st telecommunications company to directly contribute to the education of Basotho through initiatives such as the ETL Capernaum Trust and the Royal Education Development Trust that was established in 2009 to 2011 through which an amount of LSL 5 million was disbursed by the office of Her Majesty over the 5 year period. ETL Capernaum Trust was later renamed HigherLife Foundation Lesotho (HLF) and is operational to date. The fund is wholly financed through the Econet Telecom Lesotho contributing 2% of its gross revenue to the foundation.

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES

Econet Telecom Lesotho has been offering needs-based scholarships through HigherLife Foundation Lesotho and soon the scholarship will be extended to high flyers where selection will be merit-based under the name ‘Moshoeshoe 1 scholarship’ which has been recently approved by His Majesty King Letsie III. This foundation has over the years disbursed more than LSL 68,639,677.03 (Sixty-eight Million Six Hundred and Thirty-nine Thousand, Six Hundred Seventy-seven Maloti and Three Lisente) used to support the communities under seven strategic pillars namely Education as outlined in the table below, Health, Job creation & sustainable livelihoods, Leadership & lifelong development, Girls Empowerment, Sports and Social support.

Table 7: HLF statistics since inception -2011 to 2012 Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 6,512,352. 5,174,331. 5,713,929. 8,936,719.1 8,266,553.8 7,944,730. 7,343,509. 6,459,601. 7,711,003. Disbursements 04 50 79 4 6 88 86 14 22 SCHOLARSHIPS AWARDED / ANNUM 2011 2012 2013 2014 2015 2016 2017 2018 2019 Students Locally 257 160 165 430 384 510 332 248 271 Schools Locally 138 138 138 112 110 103 93 78 90 university/coll ege (local) 0 2 9 16 32 80 75 70 80 Waterford 3 7 7 2 4 6 7 5 6

US Based 3 3 11 11 9 10 5 7 Totals No students 398 310 322 571 541 708 517 406 454

The above table shows a total of 4,227 beneficiaries from the foundation. For the current financial year, an additional LSL 8 million will be disbursed in sponsorships which brings the total contribution through the fund to date to over LSL 70 million financed through ETL internal resources. The foundation has produced 11 graduates from USA Universities, 21 from Local Institutions (NUL, CAS, LP, LCE, NHTC, Scott Morija) and 5 pursuing Postgraduate studies (2 NUL, 2 in , 1 at Harvard University in USA). Some of the aforementioned beneficiaries have successfully found gainful employment abroad and locally.

The HigherLife Foundation is currently operating two ICT learning hubs at Mazenod and Roma from 2014 and 2016 respectively that are open to the public and youth around those areas at no charge. These learning centres bridge the digital divide in ICT skills, provide a platform for self-development within the Communication sector and access to quality education regardless of social status. Students from schools such as Liraoheleng Primary, Tseka Primary, Qhomane Secondary, Massabielle High, Bishop De Mazenod High, Mazenod Primary and Mazenod High, Roma Primary, Tloutle Primary, Harmony and Mahlabatheng High have enjoyed the benefits of the free lessons offered from the Learning hubs. On average, the learning hubs offer ICT services to approximately 200 people per week.

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES

High Flyer  We believe our youth are at the centre of Lesotho and Africa’s economic development. To that end, our High-Flyers program identifies talented young people and infuses them with the right combination of values, integrity, skills and experience required to make a meaningful contribution to Lesotho’s socio- economic development. Targeting students from High School to tertiary level, the High-Flyers program provides university preparation, career development, leadership development, alumni support and student life support. b) Health

Econet Telecom Lesotho through HigherLife Foundation Lesotho and in partnership with Indian Association Lesotho engage in Health expo campaigns that deliver free health services to the communities on an annual basis. The recent campaign was held at Soofia International School in Butha-Buthe district where over 150 community members received consultation services from professional doctors and free medication. The purpose of this initiative is to ensure good health and meet the communities and the government of Lesotho half way in terms of cost savings and service delivery.

Additional to necessities like food, the beneficiaries under HigherLife Foundation scholarship also receive physical and psychological medical attention on a need basis.

As said by John Wesley, cleanliness is next to Godliness, ETL is involved in cleaning campaigns where staff members start a working day with cleaning the streets closer to them in town and around HigherLife Foundation premises in Mazenod on chosen days. This is a semi-annual campaign. c) Leadership & Lifelong Development

The aim of this program is to build leaders who are prepared to drive positive change in their families, communities and nations. This is achieved through training of students on life skills such as effective communication, decision-making, problem-solving, goal-setting and digital literacy to name but a few. Approximately 1,130 received training on life skills. Nearly 15,000 students went through mentorship programs while 13,100 were guided on career options. The assistance is given to the students who in turn are expected to know the careers they want to follow after completing their LGSCE studies. d) Girls Empowerment

In partnership with Her Majesty’s initiative dubbed Hlokomela Banana, ETL through HLF, is continually distributing sanitary pads to over 3,000 school girls from different districts and mostly hard-to-reach schools country-wide. During the first two years of this initiative, a total of 731 girls from Semonkong High, Rankakala High, Sehong hong High and Secondary had received sanitary pads for 24 months. The initiative helps raise the level of self-awareness and dignity amongst disadvantaged adolescent girl children, grants access to education for the girl child thus increases literacy rate amongst women and lowers girl absenteeism rate in schools which is hugely due to menstruation according to studies. Girls are also offered leadership trainings, mentorship and support campaigns against human trafficking.

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e) Sports

In 2017 after an eight year break from soccer, Econet Telecom Lesotho announced the biggest sports sponsorship deal in the history of Lesotho. Econet’s sponsorship to the Lesotho Premier League is LSL 6 million for a contractual period of three years. Every season the league enjoys the sponsorship of LSL 2 million. The purpose of the sponsorship is to help the football players hone their skills and become big international football stars. ETL is also a long term sponsor of Rugby in Lesotho through the Federation of Lesotho Rugby. With nearly half a million spent on rugby jerseys, equipment, telecommunications gadgets, monthly airtime and cash, the sport has grown from one to six teams. This also helped with the formation of the national rugby team, Likatola. In 2019 when team members from one of the aspiring rugby teams were involved in a fatal car accident, ETL donated nearly LSL 50, 000 towards the funerals of the deceased and medical expenses of the injured. The national team is now the champions after winning Rugby 7’s international tournament against 7 other teams from Mozambique and RSA in eSwatini in December 2019. f) Social Support

The company has donated food packages and school uniforms to 550 children to date and the initiative is ongoing.

On an annual basis, ETL staff members donate groceries to one orphanage where a feast to celebrate Christmas is held for the children. God’s Love Centre orphanage is the recent beneficiary of such a donation and received bunk beds, mattresses and groceries in addition to pleasure of being served meals by ETL Management. Other orphanages that have benefitted from the initiative include Centre for orphaned and less privileged children, ‘Mants’ase, St. Cecilia, Beautiful gate, Tholoana-ea-Lerato and Beautiful Dreams Society.

ETL has also engaged in a blankets campaign to assist the children living at the orphanages and over 1,500 blankets were donated to 14 care centres that include Semonkong children’s home, Rachel’s place in Qacha’snek, Pulane Children’s home in Quthing, Thuso-e-tsoa-kae handicapped in Butha-Buthe and many more. ETL has provided a rent-free, sheltered, small business space to one street vendor who sells sweets, airtime and fruits trading as ‘Manthabi Fruits Corner. The company is responsible for maintenance of the space, electricity & water bills as well as operating licence fees for the vendor. Her life has changed for the better since her business is no longer affected by weather conditions and operating from a clean area has brought new customers.

6.2 Future Corporate Social Investment (CSI) undertakings;

ETL through Higherlife Foundation will continue to;  Organize and host the two Health Expo or Free Medical Camps per year in collaboration with Indian Association of Lesotho and Ministry of Health, PSI, the Lesotho Blood Bank, Beautiful Dream Society, Child Help line and JHPIEGO

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 Provide medical support to HLF Lesotho beneficiaries who may need such from time to time  Volunteer and engage in cleaning campaigns through which we hope to instill the love of Lesotho to our fellow Lesotho citizens.  Organize and host the HLF Health marathon in conjunction with Herbalife, Mamoth, Momentum, Liberty and EcoSure Rebolokehile.  Distribute sanitary wear to at least 600 girls in 5 identified schools namely Sehonghong, Thabana- Tsoana, Semonkong, Rankakala, Quthing LECSA,  Support the initiative by adopting 5 Additional schools for the provision of sanitary pads under Hlokomela Banana  Provide comprehensive sexuality education to 6,000 adolescent and young girls on an annual basis.  Empower 400 girls per annum with 21st century skills (4IR) by offering coding trainings in partnership with BasaliTech & Girls Coding Academy.  The distribution of food packages to the neediest beneficiaries will continue under HigherLife Foundation Lesotho  Donations to registered orphanages country-wide will be done upon needs assessment per care facility and this will be coupled with Christmas lunch at a total cost of LSL 50, 000 per annum.  The plan is to have provided mentorship to 60,000 Basotho Youth by February 2026.  To have provided leadership training to 10,000 students and fostering 5,000 young talented students in order to develop and strengthen a cohort of Yale Young African Scholar (YYAS) candidates by February 2026. YYAS is an enrichment program designed for African secondary school students who wish to make a meaningful impact as young leaders on the continent. YYAS is in partnership with HigherLife Foundation.  To have promoted general health and well-being of 70 identified needy children per year through the provision of food and hygiene interventions by February 2026.  To have empowered and enabled 5,650 students to cope with life challenges through mentorship.  To register 7,500 mentors by February 2026 and provide training in collaboration with institutions such as LNDC and to provide mentorship to entrepreneurs  To continue promoting ETL CSR arm, HigherLife Foundation brand recognition, thereby increasing knowledge of the services to various target market segments through information sharing and synergies/ collaborations by February 2026.

Access to Education A total disbursement of LSL 62, 608, 562.00 will be used in the execution of the activities outlined under each of the strategic pillars. A total of 2,600 orphaned, vulnerable and gifted children will be awarded scholarships under needs-based (HLF) and merit-based (Moshoeshoe1) between the year 2020 and 2025. Over 40,000 lives have already been impacted through HigherLife Foundation Lesotho and an additional 60, 000 lives will be touched through Econet Telecom Lesotho’ Corporate Social Responsibility (CSR) initiatives by 2025:

 Econet will continue to provide scholarships to 500 orphaned and vulnerable children per year until February 2026 when the number is reviewed. This includes tuition fees, learning materials and boarding fees on a need basis.

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 To create and develop Ruzivo (loosely translated as knowledge) digital learning using the National Curriculum Development Centre’s approved syllabus and curriculum in collaboration with the Ministry of Education and Training from 2021 onwards.  Provision of Ruzivo Digital Learning to 6,000 primary and secondary students per year from March 2021  To provide ICT training to 100 HLF contact teachers and 2,000 students from March 2021.  Provide merit-based scholarships to at least 20 excellent performing students to pursue A-level per year from 2020  Identify talented students for possible STAR Leadership Academy recruitment ,  Continue to provide holistic education support (Tuition, monthly stipends, textbooks, medical assistance) to Tertiary, Colleges, Polytechnic and TVET students  Catch them young - Identify and track meritorious students and begin to instill in them the right combination of values.

6.3 Technology

As established by World bank in the early evolution of ICT and supported by multiple research bodies such as Independent University of , that as a mandatory and progressive part of modern telecommunication, Internet has become a prerequisite in the development and success of any modern country, Lesotho is no exception.

Today, telecommunication drives everything; education, finance, industry, logistics infrastructure, science and technology. In line with the world trends on ICT technology developments, ETL mobile communications services have traversed the various technologies since the start of the business. The diagram below shows the evolution of the said technologies to date. ETL confirms that its core network is now capable to deliver 5G services to the consumers and businesses.

It is worth noting that the technologies as outlined in the diagram above (2G, 3G and 4G) were deployed within ETL and have now been enhanced by the more efficient and cost-effective latest radio technologies of Software Defined Radio (SDR) and Network Virtualization Function platform for Core networks. The latest deployment for

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES network modernisation brought down the total cost of ownership, fixed and mobile convergence (FMC). These brought enhanced Network Quality, best user experience, High Definition (HD) Voice and Video.

When ETL started operations in the late 70’s as a fixed services provider it joined the entry level Analog technology run through copper cables to deliver voice and data as essential services. When it introduced the mobile subsidiary in 2001 and began the GSM journey with 2G Mobile wireless technologies and continued to align itself to the latest 3G, 4G (LTE and LTE-A) and 5G technologies. This continuous investment enables ETL to provide Basotho with the latest best technology competitive to the rest of the world. The following maps are the ETL coverage maps for 2G, 3G and 4G/LTE.

2G and 3G Coverages

Number of Sites = 216 Number of Sites = 216

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LTE/4G Coverage

Number of Sites = 83

Improvements in the fixed telephony services and infrastructure has seen ETL migrate from the copper driven transmission methods to the current fibre connectivity with improved network performance and capability to deliver converged solutions as a Telecommunications, Media and Technology (TMT) company. The new technologies introduced improved rates, speeds and over the top services. ETL deployed fibre transmission backbone connecting all the Lesotho major towns and district town centres. These enable seamless service provision across all the districts. ETL is able to offer the same connectivity speeds in all the districts and town centres; Qacha’s Nek, Thaba-tseka, , Botha-Bothe, , Maputsoe, Teyateyaneng, Maseru, Roma, Morija, , Mohale’s Hoek and Quthung. ETL has managed to offer even the mines with world class connectivity with protection that no other operator in Lesotho can offer.

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The below diagram shows ETL’s transmission backbone network that carries the entire country’s data and voice services.

ETL has further deployed the latest, fastest and reliable fibre to the home and business (FTTx) in Maseru. FTTx enables ETL to offer the most affordable unlimited broadband to the homes and businesses without any quality degradation or congestion. The following diagram shows the coverage map of FTTx.

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ETL has critical data infrastructure to support the Lesotho Government e-initiatives. This was achieved through a competitive tender process where ETL was selected as the best value provider for the Lesotho Government Data Network (LGDN). This project has been operational since 2009 to date. It provides the backbone transmission and connectivity between and to various government agencies that provide essential services. These include the Integrated Financial Management Information System (IFMIS), Health Centres, Home Affairs National ID Registry and Passport services platform, Transport and Traffic Vehicle and Driver registration facilities etc. The services subsist to date with minor modifications as required for upgrades on capacities in line with the increasing demand for data usage with the related high speeds and reliability on the new technologies. These services are running on ETL’s highly resilient fibre network and high capacity microwave systems with MPLS technology.

In addition to the above the company provides essential backbone transmission services and Internet to the banking sector (ATM connectivity and branches), public sector, Mining houses, Educational Institutions and to other small to medium enterprises as well as the mandatory requirements for disaster recovery and data security for these institutions.

With further advancements on the LTE network, ETL has now introduced high-speed wireless communications. The ETL LTE/4G is available in all the Lesotho district town centres and major towns. ETL has deployed the LTE on 800MHz spectrum to cover the rural and semi-urban areas that are not densely populated. The 800MHz spectrum enables ETL to cover larger areas with fewer sites and hence lower cost of deployment. With the available spectrum of 1800MHz and 800MHz, the company manages to do carrier aggregation to improve the download and upload speeds to 400Mbps and 150Mbps respectively.The improved speeds, volumes, and latency

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ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES of data transfer cater for existing and new use case scenarios for the road ahead on the technology deployed as depicted below:

6.4 Performance on Conditions of the current Unified Licence

OPERATING LICENCE (MOBILE)

I. CONDITION 4 — PROVISION OF PUBLIC EMERGENCY CALL SERVICES

Econet Telecom Lesotho has provisioned the following emergency numbers as one of company’s initiative and requirement to provide critical services to the public. Number Service 115 Fire 112 Police 117 Domestic Violence 116 Child Help Line The above numbers are routed to dedicated MSISDNs. II. CONDITION 10 — PRIORITISATION OF GOVERNMENT SERVICES DURING PUBLIC EMERGENCIES

ETL does not have a contract or agreement with the Disaster Management Authority (DMA). However, ETL has established an arrangement that it will send out messages for free as Corporate Social Responsibility as a priority upon request by the DMA. SEE ANNEXURE 4 (a request letter from the DMA is accordingly attached as proof)

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III. CONDITION 14 — CUSTOMER SERVICE STANDARDS

In 2011 ETL approved the Customer Service Standards and when mobile money was introduced in 2012 the above mentioned document was reviewed to accommodate the management of complaints from mobile money services. The respective copies of the documents detailing the enquiries and complaints guidelines are collectively attached as ANNEXURE 5. However, ETL is currently in the process of reviewing the document, with the intention to update it and make it more relevant to today’s operating circumstances.

7. Requested Consideration and Approval

We hereby request the Authority’s approval for renewal of the ETL licence which is necessary in supporting the continuity and sustainability of Lesotho’s economy, especially the mining, banking, cannabis and manufacturing sectors as well as enabling the Government to attract Foreign Direct Investment (FDI). ETL plays a pivotal role in the future development, economic growth of the country and Basotho’s day to day lives. ETL is uniquely positioned to provide and support Government in its delivery of essential services to its citizens.

Management of ETL further confirms that they remain available to address any issues and to provide any clarifications.

End

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ANNEXURES Annexure 1: List of Beneficiaries to CSI

Annexure 2: Compliance Matrix

Compliance Matrix September 2020.xlsx Annexure 3: List of Local Supplier

Annexure 4: Public Emergency Services

Annexure 5 (a): Customer Compliants Guidelines - 2013

Customer Complaints Guidelines Ecosach and Ecosure Incorporated Final 26112013 (Clean Version).doc Annexure 5 (b): Customer Compliants Guidelines - 2011

Customer Complaints Guidelines 2011_Final (Word).docx

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