ESCCOM INTERROGATES TELECOMS PRICE DROP

MBABANE – ESCCOM has committed to undertake a pricing benchmark study to assess the impact of impact of the price transformation program on telecommunications operators’ revenue in Eswatini.

The study could also cross-check the general wholesale and retail price levels in comparable countries in the region. Price Benchmarking could provide the Eswatini Communications Commission (ESCCOM) with insight into the reasonableness of prevailing prices and inform price regulation to ensure that all communications services are provided in a manner that will best promote economic and social development in the Kingdom of Eswatini.

“The objective of this consultancy is to undertake a price benchmark study to inform regulation of electronic communication service wholesale and retail pricing,” explained ESCCOM in the Request for Proposals to implement the study which was issued by Eswatini Public Procurement Regulatory Agency (ESPPRA). The scope includes, but not limited to, carrying out a situational analysis, an overview of the telecommunications sector regulatory environment, quantitative analysis of the impact of the price transformation program on telecommunications revenue and the social and macroeconomic Context such as Gross Domestic Product (GDP), population and household expenditure together with other indicators.

Study

Providing a background as to what culminated into undertaking the study, it was explained that in the financial Year 2017/18, they ESCCOM undertook a pricing baseline study of the communications sector. It was mentioned that according to the findings of the study, using the Research ICT Africa (RIA) pricing index, the cost to communicate in the kingdom was found to be high relative to other countries in the Southern African Development Community (SADC) region.  “The high cost to communicate in the country was mainly attributed to high input costs, high wholesale tariffs for internet bandwidth and leased lines by Eswatini Post and Telecommunications (EPTC),” read the RFP in part.

Wholesale

It was mentioned that ESCCOM undertook to implement a three-year glide path wholesale rate reduction programme. The organisation led by Chief Executive Officer (CEO) Mvilawemphi Dlamini said considering the significant cost and extensive process of developing a cost model, they opted for an open and transparent negotiation process in determining reduced wholesale rates. “The cost of leased lines, dedicated internet and dedicated internet and leased line bundles were effectively reduced by 33 per cent, 35 per cent and 31 per cent in FY 2017/18, 2018/19 and 2019/20, respectively,” said ESCCOM. It was pointed out that the reduction in wholesale rates was also passed on to consumers, new retail tariffs were presented to and approved by the commission after reduced wholesale rates were effected. ESCCOM said the introduction of competition in the mobile market in the form of a second mobile operator, Eswatini Mobile in 2017, introduced competitive pricing that also caused a significant reduction in the price of voice calls per minute and data per megabyte (MB).

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