Zambia starts the hunt for international operator to invest in Zamtel

Telecom sector woes reflect those of other countries in Africa

Three years after Zambia repossessed incumbent operator Zamtel from Libya’s LapGreen Networks, the Zambian government has started hunting for an international operator to invest in the company.

Zamtel, like many other incumbent operators in Africa, is losing money. Last month, the Zambian government said Zamtel needs US$300 million for it to become viable, but that it doesn’t have the money to recapitalize the company. This has forced the Zambian government to start the hunt for an international telecom company to invest in Zamtel in order to save it from closing.

The problems facing Zamtel underlines the difficulties that other African governments have in keeping incumbent operators in business. Zamtel was sold to LapGreen Networks in 2010 for US$257 million by the previous administration. In 2012 however, the current Zambian administration repossessed Zamtel from the Libyans, on grounds that the company was illegally sold by the previous administration. It accused the prior government of corruption in a range of deals, including the sale of Zamtel.

But minister of Communications and Transport, Yamfwa Mukanga, has revealed that the Zambian government is once again hunting for an international telecom operator to invest in the company. Mukanga said government red tape has prevented Zamtel from competing against private operators in the sector, including South Africa’s MTN and India’s Bharti Airtel.

“We want to bring another investor on board to assist us run and improve the operations of Zamtel because currently, Zamtel is making loses and not in good shape financially,” said Mukanga in an interview this week.

Zamtel is the number-three operator in the country. MTN is currently Zambia’s largest telecom operator with 51 percent market share, followed by Airtel.

In Zimbabwe, the situation is not different from that of Zamtel. The Zimbabwean government is also facing difficulties in running NetOne profitably in the face of stiff competition from private operators who are technologically advanced and have sufficient cash to invest.

In a bid to improve the operations of NetOne, the Zimbabwean government is sacking almost the entire management at the company, accusing it of incompetence. The Zimbabwean government claims in has invested US$500 million in the company to date.

Zimbabwe’s minister of ICT, Supa Mandiwanzira, said NetOne has relied too much on government funding.

Edith Mwale, telecom analyst at Africa Center for ICT Development said it is difficult for incumbent operators to make a profit because most government officials are using their services without paying for them.

“A good example is Zambia and Zimbabwe. The Zimbabwean government owes NetOne over US$10 million while the Zambian government owes Zamtel about US$4 million. This money has to be paid for these companies to be viable,” said Mwale via phone.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Malakata

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?