The Sunday Mail
Minister Supa Mandiwanzira
Enacy Mapakame
Business Reporter
LOCAL telecommunication companies on Thursday agreed to a Government-brokered deal to share infrastructure, ending months of unease and uncertainty.
The companies have been under pressure to share infrastructure such as base stations and fibre-optic networks in order to reduce operational costs and conveniently serve subscribers.
Government contends that infrastructure sharing will cut costs by more than 60 percent.
A fortnight ago, Government directed all competing firms to use infrastructure communally within the next three months. Details of the framework that will be used by the companies were still sketchy last week as the Thursday meeting was closed to the media.
However, Information, Communication Technology, Postal and Courier Services Minister, Mr Supa Mandiwanzira, who attended the meeting, said there was nothing exploitative about sharing infrastructure because those firms who spent more on infrastructure development will recoup their expenses through levying a fee for their services.
“Companies put a lot of money into infrastructure and they need to recover that and the only way is through sharing with others. When you start sharing infrastructure, you ask them (other operators) to pay for using your infrastructure,” he said.
Econet, which has had to source fund from the international market to sponsor its local expansion projects, has been resisting the proposal.
The company, which has spent US$1,2 billion in infrastructure development and taxes during the past 15 years, argues that such an undertaking is skewed in favour of those that have made poor investment decisions.
Though a deal has been tentatively agreed, there still remains some pitfalls.
Experts say they are still questions of who will set the charges for infrastructure and whether the set tariffs will be mutually agreed to.
There are also issues of what would happen if some of the telecommunication companies failed to pay for the infrastructure rented to them.
It is also argued that the fear of losing market share for those that have a wider network coverage from years of sustained infrastructure investments is real.
Experts say such companies may lose that competitive advantage.
Mr Tawanda Nyambirai, who attended the Thursday meeting as a consultant, said there was consensus among companies that the authorities were not seeking to exploit anyone, but were pushing to cut costs and boost efficiency.
“There is understanding that Government is not going to expropriate any infrastructure belonging to any operator and that there is no one who will use anyone’s infrastructure for free.
“A framework that recognises that infrastructure was developed at a cost will be put in place, and that is very positive and progressive.
“We agree with the fact that infrastructure was developed at a cost at a time when the regulator promoted competitiveness based on deployment of infrastructure,” said Mr Nyambirai.
A section of the market argues that in the past, the Government adopted a model that prioritised individual infrastructure development, and not service delivery.
“The real problem is that we have allowed the market to fund their own base stations in the first place. Government, maybe, through arms like Potraz, was supposed to be the one pulling these up,” said Harare ICT blogger, Mr Tonderai Rutsito.
Minister Mandiwanzira admitted as much.
He said: “A framework was not in place in time to avoid the duplication of infrastructure we are seeing proliferating across the country on various hill tops and mountains where three towers are standing when one can satisfy the needs of all the other players.
“When there is duplication of infrastructure, they are passing on the cost to the consumer. We need the consumer to be saved from unnecessary costs.”
Broadly, however, analysts say infrastructure sharing is a good deal for cutting costs and achieving capital savings.
Harare-based ICT expert, Mr Soul Kabweza said agreement terms need to be fair, equitable and transparent.
“The terms (for an agreement) have to be attractive enough for either party.
“The bone of contention is the terms of sharing, which need to be fair on forward-looking companies that invested on infrastructure such as TelOne (copper lines and fibre) or Econet (towers and sites) for instance.
“What is clear though is that because of the vast gaps in infrastructure between players, especially in mobile, other operators will certainly rent more than they will rent out to other players,” said Mr Kabweza.
Infrastructure sharing is currently not mandatory in Zimbabwe, but other firms are already doing so at a lower scale.
Apart from the renting model, companies may adopt a model that allows for the creation of a separate entity that owns the infrastructure, said Mr Kabweza.
That model is being used successfully in Zambia.
“Essentially, the existing operators will sell all their infrastructure to this new infrastructure company, which in turn will lease it out to the operators. In such a case (but again depending on the terms of the sale and rentals) the company with the most infrastructure stands to benefit from the cash-flow boost such a sale would provide,” he explained.
Telecel Zimbabwe, which has spent over US$300 million in taxes and infrastructure development over the years, says it is amenable to sharing.
“Telecel Zimbabwe has always been in support of anything and everything that ensures we provide affordable services to the market,” Mr Obert Mandimika, Telecel communications and branding director told journalists at a press conference in Harare on Wednesday last week.
“We believe that infrastructure sharing has capacity and potential to reduce operational costs when it is done in a transparent and equitable manner.
“It is a question of how it is operationalised and rolled out, so that it is done in an equitable and transparent manner. We have seen and believe there is scope for it to reduce operating costs instead of duplicating resources and infrastructure in all areas of network coverage.”
Econet only said that “it continues to engage with the relevant authorities on a solution that is amicable to all parties concerned.”
