Zambian ICT Sector grows

By Nawa Mutumweno – The Zambian Information Communications and Technology sector has grown substantially in recent times, becoming a key factor in the country’s economic dispensation.

From the time the ICT Policy was launched in March 2007, the sector has recorded developmental strides worth writing home about. The policy, although deficient in some areas at the time, has given birth to legislative instruments that have potential to spur unprecedented growth in all the ICT sub-sectors.

One of the key objectives of the policy (which promulgates telecommunications, information technology, electronic media and postal services) in terms of developing the Zambian ICT sector, which is still relatively small and underdeveloped, is to develop  and implement special tax instruments and incentives to promote the growth of the local ICT production and service industry.

Government has fully committed itself to establishing a Computer Crimes Investigation Unit for cyber law enforcement and the National Electronic Communication Security Centre within the internal organs of specialized security agencies.

Since then, the major development on this score has been the enactment of the Information and Communication Technologies Act No.15 of 2009 on October 4, 2009 that repealed the Telecommunications Act and the Radio Communications Act. Also enacted were the Electronic Communications & Transactions Act and the Zambia Postal & Courier Services Act.

This development has brought about a metamorphosis of the Communications Authority of Zambia (CAZ) which is now aptly called the Zambia Information & Communications Technology Authority (ZICTA).  These pieces of legislation introduce new functions for the institution and gives it more operational ‘teeth’. The enactment of the ICT Act is expected to encourage an influx of new market players offering a variety of services based on emergent technologies which are deployed with ease.

The fresh and enhanced mandate gives the authority new powers especially as it relates to economic regulation and consumer protection; gives additional responsibilities of regulating postal and courier services including oversight over electronic transactions. The Authority is also charged with the responsibility to review the current licensing framework by coming up with a converged and unified licensing.

Another landmark on the ICT platform is the impending partial privatization of the state-owned Zambia Telecommunications Corporation (ZAMTEL). At the time of going to press, the Zambia Development Agency (ZDA) had announced that the four companies that submitted bids in the first round of the ZAMTEL privatization process had qualified to the second stage of the bidding process. The companies that have been short-listed are Bharat Sanchar Nigam Limited (BSNL) of India, LAP Greencom Limited of Libya, Unitel of Angola and Altimo Holding of Russia.

The good news to spring from the country’s telecommunication industry in recent times is that Government has finally softened its once-unshakeable stance on the liberalization of the International Gateway (IGW). Government had been reluctant to ‘let go’ of the reins of this important installation for “security reasons” for a long time. Presenting last year’s National Budget on January 30, 2009, Finance and National Planning Minister Dr Situmbeko Musokotwane asserted Government’s desire to reduce the prohibitive $12 million price tag affixed to the IGW to more regionally-conformable figures.

Proponents of the liberalization of the IGW have argued that ZAMTEL has not invested heavily in the facility for it to be critically affected by competition. A consultancy report commissioned by the Ministry of Communications and Transport dated September 30, 2004, outlines five restructuring options proposed by industry experts. According to the Zambia Competition Commission (ZCC), the most workable and results-oriented alternative is the award of licences to all qualified applicants as restricting the facility to one or a few players who are vertically integrated is a sure route to creating a flourishing unfair competitive environment.

ZAMTEL has the monopoly in the IGW as there has, until recently,  been no deliberate and concrete efforts to liberalise the facility. It operates the earth stations that form the backbone of the international gateway links to America, Europe, Asia, Australia and Africa. This monopoly has made international calls from Zambia extremely expensive.

The public sector and national telecommunications service provider owns the fixed lines and Cell-Z, one of the three mobile phone service providers, in addition to the IGW. Other ZAMTEL products include ISDN for broadband requirements, enabling clients to transmit information such as voice, date, video and images over telephone lines; Prepaid Telephone Service; Prepaid Calling Card; Internet Service (ZAMTEL Online), offering a cost-effective and flexible internet connection in both dial-up and wireless options; ZAMTEL ADSL (Asymmetric Digital Subscriber Line), ensuring an always-on broadband connection; and Leased Line Services which provides customers with a round-the-clock, secure, high quality and point-to-point service over a digital transmission network.

ZAMTEL had also put in place a $105 million fibre-optic network project whose roll-out programme was underway with excavation works in various towns. The status of affairs is that the company will now work with ZESCO on this ambitious project whose aim is to facilitate vastly increased broadband width for transmission of data at very high speeds, thus leading to reduced calling rates.

The parastatal belongs to the continental Eastern African Submarine Cable System (EASSy), a $200 million-plus telecommunications solution to run at the bottom of the Indian Ocean from Port Sudan to Mthunzuni in South Africa. This submarine optical fibre cable system would connect the Eastern African seaboard and the locked countries to the rest of the world. The initiative encompasses 22 telecom operators representing 20 countries, 90 percent of which are African operators, both private and public enterprises. On March 9, 2007, the EASSy members formally signed the Supply Contract with Alcatel-Lucent, who will implement the project on a full turnkey basis. The project is envisaged to be concluded in mid 2010.

One sub sector that has grown by leaps and bounds is the mobile phone service. In the late 1990s when the cellphone ‘craze’ invaded Zambia, having a mobile phone was a sign of affluence and sophistication. Today, things have changed with almost every third person you meet on the street ‘brandishing’ a phone. Mobile phone subscribers currently number around 5 million (with Zain Zambia, the country’s leading mobile provider accounting for 3 million. Zain is owned by the Kuwait-based Zain Group, a leading telecommunications mobile operator servicing over 50 million customers in 22 countries across the Middle East and Africa, creating the world’s first borderless mobile service (dubbed ‘One Network’) across two continents. The company operates in all the 72 districts of the country, a feat yet to be matched. MTN, the second largest mobile phone service provider (dubbed the fastest growing) is also a force to reckon with, currently expanding its network to rope in more subscribers while Cell Z has signed a multi-million dollar contract with ZTE of China to expand its GSM network.

There is a possibility of a fourth provider on the horizon following the lifting of an injunction which had halted the process of issuance of a licence after a legal suit by Vodacom Zambia. A fourth provider would increase competition in the sector, generate sustainable improvements in the quality of services, reduce tariffs and extend service outreach to more areas. The mobile phone service providers have partnered with ZTE to provide their respective cheap branded handsets, bringing affordable communication to even poor sections of the population. They have also teamed up with other service providers such as banks, broadcasting stations, farmers organisations, among others for Short Messaging System initiatives and solutions.

Other developments in telecommunications include the following:- Zain Zambia introduced blackberry business communication solution to local customers; MTN constructed a communication mast in South Luangwa National Park. MMobile, a member of the Melcome Group invested $10 million to set up the first ever mobile phone assembly plant in Zambia.

From humble internet genesis in 1994, when Zamnet Communication Systems Limited (Zamnet) landed on the world wide web as the country’s first ISP and one of the first in sub-Saharan Africa, a number of players have blossomed in the sub-sector. These include Coppernet Solutions, Uunet, Realtime, Microlink and Africonnect as the major ones. These ISPs provide an array of services including  broadband wireless, dial-up service, satellite internet services (to remote area which are outside wireless coverage and where telephone services are either of poor quality or non existent), web design, development and hosting, domain registration, virtual private network (VPN), addressing need for organizations that operate remote offices, network design and consultancy, training (Microsoft-certified) and prometric testing centre and intranet design. Zamnet, owned by the University of Zambia (UNZA) plans to offload 70 percent of its shares to an equity partner shortly. This awaits Government approval. MWEB of South Africa has expressed interest in the venture.

Other services include Payroll Systems, Health Management Systems, Human Resource Systems, Metal Export Systems, Financial Systems and Zambia Business Portal. Apart from providing internet connectivity on their WAP-enabled handsets, ZAIN and MTN also supply branded cost-effective modems, delivering a fast, reliable and quality wireless internet access through their networks. One does not have to have a computer or go to an internet café to be online.

Indeed the Zambian ICT sector has come a long way. There is still ample room for investment as more and more people become computer-literate and technologically-inclined.