MINISTRY OF WORKS, TRANSPORT AND COMMUNICATION 6. PRINCIPLES TO GUIDE THE RESCRUTURING PROCESS The present structure of the telecommunications industry is characterised by monopoly provision of services by a state owned corporation. Although a common structure in many countries, this model has been less successful in satisfying the needs for efficient telecommunication services in Botswana in the past, and it is even more unlikely to achieve the stipulated goals for the future. BTC's financial and human resource constraints have created an imbalance in supply and demand of services which might have a negative impact on Botswana's economic and social development. Thus, it is necessary to add resources to the industry to exploit the potential of telecommunications as a means for national development. The private sector should be promoted to supply these additional resources. The underlying philosophy for transformation of the industry is to give the market forces a chance to determine supply and demand in a regulated environment. 6.1 COMPETITION IS INTRODUCED IN THE INDUSTRY AND THE MONOPOLY IN PROVISION OF TELECOMMUNICATIONS SERVICES IS ABOLISHED. Justification. Considering the huge and growing demand for telecommunication services it cannot be expected of one operator to satisfy the demand for an increasing range of telecommunication products and services in the industry. Implications. Competition encourages service improvements, innovation and efficiency and it will also accelerate the speed of market coverage of telephony. However, competition may be a less effective instrument for rapid expansion of the network in rural areas. Given the prevailing situation, with massive investments needed to meet the unsatisfied demand, market forces alone will not develop the industry in a direction satisfactory to Government. Although new entrants will increase the capacity of the industry, investments are likely to concentrate in the most profitable areas where the rate of return on investments is highest. Competition will also decrease the margins of service providers and reduce the possibility of cross-subsidization. In order to secure a balanced 12 TELECOMMUNICATIONS POLICY FOR BOTSWANA