Zambia opens up ICT to international investors

Zambia is opening up its ICT sector to international investors, announcing that it is taking bids for a stake in Zamtel and offering new rules for foreign telecom and IT companies that want to do business in the country.

The Zambia Development Agency (ZDA) this week is clearing the way for international and regional service providers to compete to buy a stake in Zamtel, the financially troubled incumbent operator, in order to save it from collapsing.

At a media briefing in Lusaka Wednesday ZDA CEO Andrew Chipwende announced that ZDA has now opened the door for international bidding on the company.

The announcement comes less than three months after Zambian President Rupiah Banda said the Zambian government decided to sell a 75 percent share in the company in order to save it from closing.

By selling Zamtel, the Zambian government hopes that the company will become viable and able to compete with regional telecom service providers. Over the past few years, Zamtel -- which provides fixed, mobile and Internet services -- has been recording mounting loses and operational problems. The Zambian government claims it has no money to finance the continued operation of the company.

Just as important for the long term, the government -- after many pronouncements and expectations -- has finally enacted a law that is expected to make the country the best ICT investment destination in the Southern Africa region outside South Africa.

President Banda has assented to the information and communication technology (ICT) law that is aimed at attracting more international investments in the country's telecom sector by removing bureaucracy in the license acquisition process for service providers.

The new law empowers the Zambia Information Communications Technology Authority (ZICTAT), the country's telecom sector regulator to issue service and networking licenses for service providers. Several international service providers feared investing in the country because of restrictive license conditions and bureaucracy in acquiring the licenses.

Communications Authority of Zambia Technical Services Manager Mwenya Mutale said the new law will effectively regulate the ICT sector. In addition to attracting foreign investors, the new law will further protect the rights and interests of service providers and consumers.

The minister of Communications and Transport Geoffrey Lungwangwa said, "the new law empowers ZICTAT to regulate tariffs for dominant service providers and agreements on interconnection fees."

The new law also stops Zamtel from restricting competition through overcharging for interconnection fees and access agreements.

Zamtel owns the Mwembeshi satellite earth station, which provides an international gateway to private service providers Zain and MTN. Zamtel forms interconnection agreements with these providers to route their international calls.

The international gateway charges and interconnection fees agreements will now be overseen by ZICTAT on a nondiscriminatory basis and the agency will penalize any service providers using unapproved tariffs.