Policy Brief 6, 2017: Lesotho
The telecommunications market in Lesotho is structured around two vertically-integrated operators with Vodacom Lesotho dominating the mobile market and Econet Liquid (ETL) dominating the fixed market. Both companies have made significant investments in network extension, which have been complemented by a dedicated Universal Service Fund (USF) — established in 2009 in an effort to expand coverage to less economic areas of the mountainous country. In the process, the USF benefited more than 100000 people in 320 villages — out of a total population of little over 2 million. This has extended 2G and 3G coverage to more than 90% of the population with at least one LTE base station in each district in 2016.
“he reasons for the continued digital divide between those able to access the Internet and those unable to can be explained by unaffordability of services and Internet-enabled devices. RIA’s Beyond Access Surveys assessed demand-side trends in Lesotho’s ICT sector this year and the results show 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 while most of the population are left offline, or only able to be online intermittently and for short periods of time due to the relatively high cost of communications for them.
Without a full cost-study, it is difficult to establish if prices in Lesotho reflect the real costs (with a fair rate of return) of delivering services under the difficult conditions that prevail in Lesotho, or whether regulation is required to ensure that prices are cost based. What is clear from assessing the individual users is that current prices, even relatively well-benchmarked data prices, are unaffordable for many Basotho. About 41% indicated that the reason they do not use the Internet is that they cannot afford to. Finding ways of supplementing personal use through demand aggregation at public access points, such as free public Wi-Fi spots at all public buildings, would be a good use of universal service funds. Clearly, reducing the price of all current services would be beneficial.
Highlights:
1. Lesotho is ranked 35th out of 49 African countries in both of RIA’s 1GB data and voice/SMS baskets in Q2 2017.
2. Despite 90% 3G coverage, 70% of Lesotho residents do not use the Internet.
3. In the Internet using population, 86% use smartphones for access, but the cost of devices prevents others coming online.
4. The telecommunications market is highly concentrated, with Vodacom Lesotho dominating around 80% of the mobile market and Econet Liquid dominating various segments of the fixed market.
