Potraz plans for $60m projects in limbo

Published: 05 May 2014

The Postal and Telecommunications Regulatory Authority of Zimbabwe's plans to roll out $62 million worth of infrastructure projects this year have been seriously hamstrung by a drastic drop in revenue.

Potraz acting director general Mr Alfred Marisa told The Herald Business that the problem of inadequate funding worsened last year after operators negotiated their contribution under the universal services fund downward from 2 percent to 0,5 percent of a mobile network operator's revenue.

This has set back the pace of a series of telecoms infrastructure projects Potraz wanted to roll out this year including 40 towers that would cost $30 million.

Other projects affected by the sudden and marked decline in the statutory contributions from operators include 1 000 schools under the $12 million "connect a school connect a community" project, e-Government projects worth $7 million and connectivity to rural post offices at a cost of $3 million.

"At the current levels of collections from licensed operators; these projects alone would take more than seven years to complete and yet, in terms of making ICTs readily available to the majority of citizens, this is just a drop in the ocean," Mr Marisa said.

Operators have invested huge amounts of money in the mobile telecommunications industry since dollarisation in 2009 with mobile penetration rate as of December 31 2013 averaging 104,4 percent.

Zimbabwe has three main mobile phone operators namely Econet Wireless, the country's single largest mobile network operator, Telecel and Net-One, which is the oldest but now the smallest.

A recent World Bank study of 120 countries shows that for every 10 percentage point increase in the penetration of mobile phones usage, there is a potential increase in economic growth of 0,8 percentage points in developing countries.

Potraz cited delays in getting State Procurement Board approvals for projects, the requirement and need to consult operators on disbursements of funds, consulting affected stakeholders and Government, site acquisition for construction of rural passive telecoms infrastructure as other challenges affecting projects, apart from lack of funding.

To enhance availability of telecommunication services Potraz said it is promoting competition among operators and investment into the sector by creating an enabling and conducive environment with respect to issues such as the regulatory policy framework, licensing and tariff regulation among a host of initiatives it is undertaking.

The regulator is also availing spectrum to licensed operators within the limits of available spectrum, enforcing roll out targets imposed on licensed operators and enforcing infrastructure sharing.

The USF, which Potraz is using to advance development of infrastructure, is meant to cover a number of other areas apart from construction of telecommunication passive infrastructure such as towers.

However, with respect to construction of passive telecommunication infrastructure, the fund has financed construction of access roads, towers, equipment rooms, installation of solar power and security fencing for 11 sites in not too distant past.

Three of the sites were repeater stations, which required more or less the same investment as the main sites. In addition the fund financed procurement of back-hauling radio equipment for all the sites.

Potraz said it encourages licensed operators to share infrastructure so as to optimise utilisation of resources.

"Any operator which requests to share infrastructure with another and is refused such sharing can appeal to the authority for its intervention. The authority is aware of the urgent need to revisit the current legal framework regarding ownership and sharing of infrastructure so as to improve efficiencies in the sector," Mr Marisa said.
- The Herald

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