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Table of Contents 1 ECONET TELECOM LESOTHO (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 ECONET TELECOM LESOTHO Renewal of Operating Licences 2020 (Rev.Final) Legal & Regulatory Page 1 of 25 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 Mauritius 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 ECONET TELECOM LESOTHO Renewal of Operating Licences 2020 (Rev.Final) Legal & Regulatory Page 2 of 25 ECONET TELECOM LESOTHO (PTY) LTD – MOTIVATION FOR RENEWAL OF OPERATING LICENCES 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 South Africa, Econet Wireless Zimbabwe (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.
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