THE country’s telecommunications industry is among the most critical and profitable sectors of the economy. However, Zimbabwe’s charges on voice calls and mobile data rank among the highest in the region. Zimbabwe Independent reporter Hazel Ndebele (HN) this week caught up with Information Communication Technology minister Supa Mandiwanzira (SM) and engaged him on consumer complaints, infrastructure sharing among mobile network operators and related issues. Find excerpts of the interview below.
HN: Consumers have been complaining about being overcharged by telecommunication companies for services like voice calls and mobile data, yet prices in the region are much lower. Has your ministry engaged telecoms companies on this matter.
What was the outcome of the process?
SM: Consumers are right in complaining about the costs, it is a matter that has also been worrying us at the ministry in terms of the competitiveness of the pricing regime versus what prevails in similar markets within the region. The costs of telecoms in Zimbabwe, especially data, are very high compared to other countries in the region. The explanation that we have always received from the operators is that we are a landlocked country and therefore, when bandwidth eventually lands in this country, there are many charges, including charges to pass through other countries and they have to pay a fee, but if you compare our costs with Malawi and Botswana, for instance, which are also landlocked, you will find that our costs are still quite high. The regulator with the operator did a survey about four years ago, which confirms that our voice rates are very high. Through what they call the lyric study, they agreed that the voice costs will come down, but you and I will agree that voice is no longer the most used of telecommunications services, but data is what is driving demand of the telecoms business and that is where the cost is still very high. We have asked that there be another study to really determine the cost of data in this country and once that is determined, the authority should be able to determine whether we are being overcharged or the operators are being genuine in that they are actually not making a lot of money because the costs are high. We believe that given the debacle that happened in the beginning of the year (data price hike) regarding data prices, only a comprehensive study will be able to deal with this matter once and for all.
HN: How far have you gone with discussions on infrastructure-sharing among telecoms companies?
SM: Well, we have moved beyond discussions. We actually now have a law in place that makes it mandatory for infrastructure to be shared among the operators. We believe this is important to avoid losing hard currency unnecessarily to foreign countries through the importation of equipment, which can actually be shared by all the operators. It is not a Zimbabwean concept; it’s a global best practice. There is a tendency by some to think that infrastructure-sharing means that operators like NetOne will be benefitting from infrastructure that has already been built by operators like Econet for no fee. The whole concept around infrastructure-sharing is that the sharing is done at a cost and that cost is not a charity cost, it is a cost determined by the owner of the infrastructure within reason, of course, which allows them to make profit out of the sharing of that infrastructure. Infact, what we are actually doing with infrastructure-sharing is that we are creating a new revenue line for those that have already invested in infrastructure. There is a tendency also by many to think that the biggest beneficiary in terms of infrastructure-sharing will be NetOne and the biggest loser would be Econet, infact, the opposite is actually true. The biggest investor in telecoms infrastructure in this country is the government of Zimbabwe, it owns NetOne, TelOne, Powertel and has majority stake in Telecel. Econet is currently using TelOne towers for its network, Liquid Telecoms which is an Econet related company is laying its fibre on the electric powerline that has already been installed by government through ZEDTC within the spirit of infrastructure sharing. You cannot then tell me that with that kind of use of government infrastructure Econet are nor beneficiaries. The belief by some that we are trying to disadvantage Econet can only be misplaced because we can prove that vast infrastructure belonging to government is actually being used by Econet and its companies. There has been an approach to infrastructure sharing being proposed we understand by Econet that they can only share infrastructure if they are getting one for one, where for instance, if NetOne wants to put their antennas on an Econet power, NetOne must also make available a tower for Econet to put their antennas on their tower. If NetOne wants to put on 10 towers, we understand that Econet’s assertion is that NetOne must also make available 10 towers, which they must use. That is not infrastructure-sharing and there is no provision for that in our laws. The whole concept of infrastructure-sharing is that we want other businesses outside the existing telecommunications players to be able to ride on infrastructure that has already been built. We are working right now on the introduction of Mobile Virtual Network Operators (MVNO), which do not own any infrastructure like the United Kingdom-based Virgin Mobile. It would be ridiculous for anyone to then think that an MVNO will come with infrastructure in order to share, yet they will come with nothing but an idea to use your infrastructure. So anyone who believes that infrastructure-sharing should be one for one has a misunderstanding of the law and needs to hire new lawyers!
HN: Were all the players in the telecoms industry consulted before the infrastructure-sharing law was enacted?
SM: All the mobile companies, including those most vocal against the concept, were part of putting together the regulation on infrastructure-sharing. There were several days of consultations which were done under the auspices of Potraz and that is the way regulations are made anyway so everybody contributed.
HN: Some critics say government takeover of Telecel is a ploy to have total control of the mobile telephony market. What is your view on this?
SM: They are wrong.
HN: Why do you say so?
SM: The company was being sold in the open market and government through Zarnet also went in to participate and they got the deal. It was being sold anyway and I think the telecoms and its infrastructure are now at the centre of every human beings life. It can only an irresponsible government that leaves that area unattended. All the big mobile phone companies in Europe are owned by governments and that is what a lot of people do not understand and do not know. Big companies are actually owned by governments and what they have been able to do in Europe is that they do it in a smarter way because they build Sovereign Wealth Funds (SWFs), which are controlled by the government. These SWFs are the ones which then invest in these telecommunication companies, so if you trace ownership of all the major European telecommunication companies you will find that they are actually owned to an extent by governments. When we bought the 60% stake which was owned by Vimplecom, we then established that Vimplecom itself, other than being owned by the Russians, was also owned by Telenor, which is a telecoms company owned by the government of Norway. Therefore, this means that the investor in Telecel Zimbabwe included a foreign government, so there is nothing unusual with Zimbabwe government being a shareholder. If Telenor had an interest indirectly in Telecel Zimbabwe, why then has it then become unusual for the Zimbabwe government to have an interest in a network in its own country? We need to understand how others elsewhere operate before we can start to criticise.
HN: When is government going to complete the Telecel takeover and at what stage is the deal at now?
SM: We do not do such transactions in public, we will only talk when we have concluded the deal.
HN: What is your view of telecoms companies embarking on digital satellite Television, like Econet which is running Kwese TV?
SM: First of all I believe that any company that operates in Zimbabwe, if it sees an opportunity, it must pursue that opportunity if it makes any commercial sense to it, but the company which owns Kwese TV is not in any way connected to the ministry. From what I understand, the company that wants to provide cable or television services is a company called Econet Mauritius, so we have no jurisdiction as a ministry over a company that is registered in Mauritius. I do not even know if this company is actually connected or has any local shareholding, from what I have read it is a foreign company.
HN: Have there been any applications from companies who want to enter the telecoms industry and should we expect any new players in the near future?
SM: We always have people knocking on our door for opportunities, but we always recognise that the size of our market can only take so many of the operators, especially from a network point of view, but there are still a lot of huge opportunities in data and we believe that you will see many players coming up because that’s where the growth of telecoms sector is going. However, I do not envisage that you might not see big players like NetOne, TelOne, Telecel or Econet being licensed in the near future, although we do have a lot of people knocking on our door to buy NetOne, Telecel and TelOne, but of course, we are smart enough to know that these are very strategic and very important national assets.
HN: How far have you gone in implementing the recommendations in the NetOne in 2015?
SM: The board is seized with that matter and from our understanding it is addressing most of the issues that audit report raised, but in terms of specifics that I cannot have on top of my head. However, it is something that you could actually speak to the board chair Peter Chingoka about. He has assured me that the board is seized with addressing all the malfeasances that were raised by the report.
HN: Are you happy with how TelOne is addressing the issue of legacy debts, which have been an albatross on the company’s neck?
SM: The legacy debt has been weighing down TelOne in a big way and their financial results which they produced two months ago showed this. I know that there are engagements with the Finance ministry to warehouse this legacy debt to the extent that they are engaging with that ministry and the ICT ministry to ensure that this happens. I am happy with the efforts, but the quicker we can assist them in warehousing this debt the better. However, I also understand that the Finance ministry is overwhelmed because there has to be a tangible benefit of taking that over because the telecoms is the most profitable industry at the moment and really TelOne and NetOne must demonstrate that they will put money on the table in order for minister Patrick Chinamasa to be excited about warehousing the debt. As a ministry we are putting pressure on all these entities that really it is time to demonstrate capacity, let us see the money and we have benchmarks in the market. We see Econet’s performance publicly and therefore, we say well, you are operating in the same market, can we also see performance that is reflective of the situation in the country and in the sector.
HN: At what stage is the Cybercrime and Cybersecurity Bill and when can we expect the Bill to be deliberated in parliament?
SM: As you heard His Excellency President Robert Mugabe at the official opening of the Fifth Session of the Eighth Parliament, he indicated that we will be bringing that bill during this session of parliament. Right now all the consultations have been done, all the drafting has been done by the Attorney General’s Office and it is now waiting for its chance to go before the Cabinet committee on legislation. If it is approved at that stage, then goes to the full Cabinet and if it is approved there, it will then go to parliament.