Abstract
Over the years the telecommunications industry has faced significant growth globally, particularly the mobile telecommunications market and this has resulted in intense competition. This global liberalisation led to an increase in the number of players entering the mobile telecommunications market. Taking this into consideration, the study aims to assess the impact of a new entrant in Eswatini’s mobile telecommunications market.
After 19 years of being dominated by a monopolist, MTN Eswatini, the country opened its telecommunications market for competition in 2017, making it one of the last countries in the world to eliminate monopoly in this industry. Eswatini Mobile was granted a license to operate as the second mobile operator in December 2016. This entry of competition was highly anticipated as there had been calls for another player in the market due to significantly high prices. Since the new entrant has been in the market for a while now, it was important to establish the effects of the entry in terms of competitive outcomes. Consideration was given to what effect the entry of competition had on price, consumers, regulation, and the existing incumbent’s performance.
The study followed a qualitative case study approach. The qualitative component of the research involved conducting semi-structured interviews with representatives from the different industry participants to understand how they were affected by the entry of competition.
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The findings revealed that even though the entry of competition coincided with the sector regulator’s price transformation programme, the programme’s focus was on the reduction of wholesale prices and not retail prices. Therefore, the reduction in retail prices is mainly attributed to the entry of competition.
Further findings revealed that the new entry stimulated competition, with the existing incumbent introducing many changes, including in their internal operations and tariff plans. MTN, however, continues to thrive in terms of performance post the new competition entry, despite an initial decline in profitability and subscriber base.
The study also revealed that the incomplete liberalisation of the telecommunications sector resulted in prices not falling to an optimal level. The existing monopoly in the international gateway access has negative implications such as poor quality of service due to traffic congestion, and higher costs resulting from the lack of competition. Eswatini will not realise the full benefits of liberalisation until the sector has been completely liberalised.