Zambia hints at fifth telco operator

A fifth telco
for Zambia?

Enough room says
industry regulator.

Thursday, Feb 20th

Limited options for foreign investors in Zim mobile, telecoms

Limited options for foreign investors in Zim mobile, telecoms.

Zimbabwe has effectively slammed the door on new potential investors in the country's mobile and telecommunications sectors, with experts saying the only real option left for foreign telecom investors to enter the country is through the acquisition of existing operators - two of which are owned by the government.

The southern African country only has three mobile companies – privately owned Econet Wireless - as well as government-owned NetOne and Telecel Zimbabwe. There is a fourth licence for mobile operations that is held by government run fixed phone operator, TelOne.

However, there is no more space for new licences because the country no longer has available spectrum according to Zimbabwe's telecom industry regulator, the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz).

Potraz director general, Baxton Sirewu said adding new operators would also constrain existing operators. "When it comes to those who can deploy physical infrastructure, we believe we are constrained by spectrum and we are almost at the edge. If we add more and more operators, we will constrain the operators in terms of the resources that will be made available to them," he said.

Fourth licence

According to Frost & Sullivan, limited funding has resulted in TelOne not managing to use and "develop the adequate mobile infrastructure" for the fourth mobile licence it holds.

"The only option left for new entrants will be to acquire one of the existing operators, or the 4th mobile licence granted to the fixed line operator TelOne," said Naila Govan-Vassen, ICT Industry Analyst at Frost & Sullivan.

"Existing operators could also attempt to acquire TelOne's mobile license," Govan Vassen added.

Potraz argues that virtual network operators could also represent a route into the market for international investors, as the country increases its effort to "embrace convergence and create a converged environment" for the mobile telecommunications industry.

The limited availability of frequency spectrum had become a global trend, with several other countries now banking on the release of additional spectrum from Digital Migration developments, according to industry analysts.

"This is particularly important and relevant for Zimbabwe and the rest of Africa, as lower spectrum bands will require relatively less investment to develop the mobile infrastructure in the rural and less densely populated," they have stated.

Foreign investors keen to enter the Zimbabwe market have to also consider the indigenisation policy that compels them to cede 51% majority shares into the hands of locals.

VimpelCom, which sold its majority stake in Telecel Zimbabwe, had disagreements with Harare over the company's indigenisation policy and this, together with licence renewal fee payment obligations, is generally considered to be the motivation behind the global telecom's withdrawal from the country.


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