Summary

Facts

Mascom Wireless (Pty) Limited (Mascom), a mobile operator, and Botswana Telecommunications Corporation (BTC), a fixed line operator, concluded an Interconnection Agreement on 13 August 1999. In March 2001, the parties commenced negotiations to review the Agreement. Following a deadlock the parties jointly signed a declaration of interconnection dispute dated 5 July 2002. The dispute was submitted to the Botswana Telecommunications Authority (BTA) for determination.

Decision

1. That the legal principle for determining interconnection charges is the 'fair and reasonable' test. Interconnection charges may be deemed to be fair and reasonable if they approximate costs or if they are based on efficiency criteria.

2. That an Interconnection Usage Charge (IUC) termination charge regime is the most desirable approach for the pricing of interconnection between the parties.

3. That an efficient benchmarking methodology is the most likely methodology to result in efficient termination charges for the parties.

4. That the 15 EU member countries provide the most appropriate benchmarking sample for the setting of efficient termination charges between the parties.

Reasoning

1. The BTA referred to relevant provisions in the relevant Acts, Licenses, Policies and Interconnection Agreements.

2. After considering two approaches: revenue sharing arrangements and IUC, the BTA noted that IUCs have been proven globally as the most sustainable approach to interconnection pricing in competitive multi-operator environments.

3. After considering backward and forward looking costing methodologies and benchmarking, the BTA considered the current best practice to be a forward-looking LRIC methodology. However, due to the time required to develop and implement such a methodology benchmarking was held as the most efficient methodology to determine interconnection charges for the current dispute.

4. The BTA reviewed regional benchmarking examples submitted by the parties. Noting their shortcomings, the BTA regarded EU countries to represent a sample well suited to the setting of efficient termination charges for the current dispute.