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Thursday, 1 May 2008

ZAMTEL on the verge of collapse?

Staggering news that Zamtel is operating a K150 billion deficit, and plans to retrench more than 800 workers this year to save the firm from total collapse. It appears the truth has finally hit home, that ZAMTEL is truly inefficient and very costly to the Zambian tax payer. According to Acting ZAMTEL MD, Mukela Muyunda :

"The current situation should be brought under control without any delay. We are spending more than 70 per cent on staff costs. I want to assure all our employees that those who are going to lose their jobs, both unionised workers and senior managers, are going to be taken care of. This is a surgery which is expected to be conducted to save the company. The company has been operating on losses. We have to start by making a profit of at least K20 billion this year alone in order to make the company viable again".


  1. With a similar company like KPN, salaries and social security contributions are 21% of total expenses (Appendix A).

    So what makes the ZAMTEL business model so labour intensive?

  2. So what makes the ZAMTEL business model so labour intensive?

    Are you really wondering ?

  3. Well, as you're already aware, the business which Zamtel is used to has undergone a major transformation from telecoms to ICT. The struggle for survival is not unique to Zamtel; BT, UK's former incumbent and many others around the world are equally suffering from similar symptoms.

    The technological transformation forces operational changes as well and it is how incumbents embrace both the technical and operational changes that will determine their fate.

    In BT's case, there's evidence that they're adapting technologically, (21CN project). Zamtel, I'm not sure.

    The other crucial factor is the timing of the change. An operator may change quite alright, but if it's too late, they may well be too deep making salvage that much harder.

    Remember Zamtel's introduction to mobile tech in the late '90s? At the time when new entrants (the smart ones that is), where going for digital mobile tech (CDMA or GSM), Zamtel went and spent millions of $$ on an outdated analogue mobile system called AMPS! A year or two later, they uprooted the whole thing and went digital with GSM. I wonder how that cost is haunting them today.


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