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Thursday, 19 July 2007

Mulongotism, 2nd Edition....

The Chamber of Mines have joined the increasing calls for further liberalisation of the international gateway, as the following extract from the Daily Mail shows. However, in the same article, Zesco appear to reject the Yakima proposal for incremental ownership on "security" grounds.

The Chamber of Mines says the high license fees demanded by Government for the international gateway was adding up to the high cost of doing business in Zambia. Chamber of mines chief executive officer, Fred Bantubonse, said this in a contribution to Zambia Business Forum, e-conference on factors affecting cost of telecommunication services in Zambia.

Mr Bantubonse said telecommunications services were an input into the cost of goods and services produced in Zambia. He added that providers of the service namely Celtel Zambia, MTN Zambia and Zamtel should compete on an even ground without preferential treatment for any player. “The current situation where all international traffic gets routed via Zamtel earth station does not make economic sense. It is very clear, high license fees demanded by Communication Authority for the international gateway is intended to protect Zamtel" he said...

And Zesco’s manager for the optic fibre project, Nangalelwa Sitwala said losing total control of the International gateway especially if wholly owned and controlled by foreign entities was a national security matter that should concern every one. Mr Sitwala said it was important to mitigate negative implications of liberalisation by allowing only two additional gateways with majority shareholding of Zambian operators.......
Mr Sitwala suggested that mobile operators should not be allowed to bid for international gateways operators but allow the operator to carry international traffic for mobile operators.

I find Mr Sitwala's argument incomplete. It is difficult at this stage to assess what exactly Government is worried about with respect to shared ownership. What are these security concerns? As I have previously stated if such concerns exist, my view is that these are best dealt with by using the latest technological developments in security devices and imposing proper license obligations and conditions on Zam-Int and other domestic entrants to the market. In particular, with the convergence of networks and services, the Government needs to devise appropriate cyber-security programs to deal with the challenges posed by the information society without compromising consumer privacy. But the need to address these challenges is not an excuse to delay making the market more open.

3 comments:

  1. The daily mail link points to an article about Barclays.

    "Mr Sitwala said it was important to mitigate negative implications of liberalisation by allowing only two additional gateways"

    I don't understand what he means here.

    We clearly need a fiber cable to Tanzania because they have the cheapest bandwidth.

    We should have a fiber cable to Mozambique as well for redundancy.

    We're pretty much connected to the network in Botswana already.

    It only makes sense to sell internet access in Lubumbashi because they are a major population center and not too far from the border.

    We should connect to WAFS on the west coast and SAT4 so we should go through Angola for that.

    There are potential customers in Zimbabwe...

    After that we'll need to build more networks to increase the bandwidth. Let the market decide how much...

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  2. I think you are thinking of security like in viruses. Government control of the phone lines can't change that.

    What he means is that it's nice to have a dedicated line in war time or emergency situations. I know someone who was arrested for camping too near the main earth station on the way to Mumbwa.

    The main reason that the government won't give up Zamtel is because they like the revenue. From a political view point, it's a free replacement for taxes.

    Of course Zamtel is going to make money. It has no competition and the government can insure that it never will.

    Unfortunately, competition is what drives down prices. The only way to grow is to fight.

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  3. ”The daily mail link points to an article about Barclays.
    Quite right. I have removed it. Unfortunately the Daily Mail do not save their articles. I think they have limited space on their server or something – just another reason why really they should also be privatized…but I won’t go into that just now :)

    ”Let the market decide how much...”

    Exactly!

    ”What he means is that it's nice to have a dedicated line in war time or emergency situations.”

    That can be handled through Public Service Obligations (PSOs). Even in developed countries these concerns are there. But PSOs allow Government to intervene and direct institutions and companies in time of emergencies and war period. Its perfectly acceptable.

    Incidentally the same argument has been used for holding onto the newspaper and ZNBC. But as the BBC model shows, you can let the company stand on its two feet through PSOs. In time of war you can direct them. Infact PSOs are useful for another other reason e.g. ensuring a minimum level of provision in certain areas.

    ”The main reason that the government won't give up Zamtel is because they like the revenue. From a political view point, it's a free replacement for taxes. Of course Zamtel is going to make money. It has no competition and the government can insure that it never will. “

    Quite correct. Its very much revenue driven. But Government should focus on “welfare” of society [the good of society as a whole] not “revenue” or “profit”. Magande is an intelligent chap, I am sure he has realized this. Lets hope he can be a voice of reason in this debate.

    ReplyDelete

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