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Thursday, 21 August 2008

Siliya buries the bad news...

The Transport and Communication Minister Dora Siliya, has with immediate effect raised the international gateway license fees from US$12 million to $19.5 million, despite complaints from everyone, except Zamtel. The timing is poor and certainly will do nothing to make the gateway access more competitive. The increase makes Zambia the most expensive country in the Southern African Development Community and the East African region for private telecom investors to do business. Currently, the cost of acquiring an international gateway license stands at $214,000 in Kenya and at $50,000 in Uganda.

In the meantime, the Zambia Consumers Association (ZACA) is now taking the Communication Authority of Zambia (CAZ) to task over difficulties in making international calls as a result of congestion at the Mwembeshi satellite station. Apparently the hapless Zamtel, which runs Mwembeshi satellite is failing to handle the large quantity of international calls made to and from Zambia. ZACA wants government to allow Zain and MTN to carry their own traffic and establish torrential links with neighboring countries in order to ease pressure on the Mwembeshi station. Read more
here.

7 comments:

  1. Now I see why the time it takes to access the Zambian newspaper websites has increased.

    It would be interesting to see how other African countries handle their telecommunications regulations.

    Definitely any impedients to transacting business such as telecommunications restraints or tourist visa fees should be reduced.

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  2. True, Zamtel could lose revenue and jobs if they lost revenue from more competition. However more jobs could be created from a more conducive business environment due to lower telecom costs, better service, as well as jobs created at other telecommunication providers. More jobs mean more income and thus more income tax revenue for the government. The total picture needs to be looked at.

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  3. How about a deal to offer some Zamtel workers jobs at other telecom companies coupled with a loosening of the telecom regulations (win-win solution). That way Zamtel workers do not have to worry about losing their jobs, while at the same time telecom services are improved.

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  4. difficulties in making international calls as a result of congestion at the Mwembeshi satellite station. Apparently the hapless Zamtel, which runs Mwembeshi satellite is failing to handle the large quantity of international calls made to and from Zambia.

    At least now I know why calling is so difficult.

    In this case, increased competition would be a good thing.

    The question is - when are they or the government going to act?

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  5. Kafue001,

    Your insights are useful.
    You need to get gmail account, so you can track discussions....the moment people respond to the post of interest..much easier...

    On the substance, I think its important to distinguish between reforming Zamtel and increasing the competition in the industry as a whole...of course the two are related as I have noted here.

    But in practice the solution is simple.

    Zamtel should be privatised. And this is currently being considered by the government. See this Parliamentary answer session on the financial status of ZAMTEL

    ZAMTEL owes about K400bn. But Government also owes it money. In a previous post called Parastatal Madness I discussed these issues. The problem is that government likes these inefficient parastatal, it helps it hide debt and give favours to pro government people. Its a form of government corruption.

    In terms of liberalisation of the gateway. That is no brainer...there's no doubt to my mind that a more competitive environment will ultimately create jobs for everyone.

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  6. "The problem is that government likes these inefficient parastatal, it helps it hide debt and give favours to pro government people. Its a form of government corruption."

    I would have thought government prefers this parastatal because it provides unprofitable services for social reasons, for example landlines in rural areas. But maybe this aspect of service could be handled by direct subsidy to private companies.

    Am reluctant to reveal my identity through gmail etc because somebody else started subjecting me to daily insults when I was posting on another board. But maybe I will one day to some selected people.

    ReplyDelete
  7. "I would have thought government prefers this parastatal because it provides unprofitable services for social reasons, for example landlines in rural areas. But maybe this aspect of service could be handled by direct subsidy to private companies."

    Well, the argument for parastatals is that they bring the economies of scale, without the problem of acting as a monopoly. In theory an accurately regulatory system could achieve the same thing. Basically having a local monopoly that is regulated.

    But in practice, government simply uses these companies to hide debts. See the following blogs:

    Parastatal Madness

    Parastatal Madness 2nd Edition

    Parastatal Madness, 3rd Edition

    "Am reluctant to reveal my identity through gmail etc because somebody else started subjecting me to daily insults when I was posting on another board. But maybe I will one day to some selected people."

    lol! I actually meant a fake gmail address! Not a real one....oh never have a real one!!

    ReplyDelete

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