vodacom

When people say PF are short-term oriented and more interested in making a quick buck at the expense of the future wellbeing of Zambia, it is decisions like trying to have five mobile operators in a small market like Zambia that prove it. On the face of it, people will be convinced that the new competition will reduce prices but things never work out like that all the time.

The more profitable the current providers are the better the service they will provide. A new entrant may take away 1million subscribers from both MTN and Airtel, and completely cripple Zamtel. We will not only witness a tariff war, but also a gradual deterioration in quality of services. With five operators, competition will squeeze profits and the operators will be forced to downsize their labour. Some operators might even pull out of Zambia bringing us back to where we were initially.

The claims by Minister of transport and communication, Brian Mushimba that market analysis indicates that five operators will be profitable must be clouded with confirmation biases. Nigeria has a population of 150 million but with 4 or 5 operators (including Etisalat, MTN, Airtel, Glo). South Africa has a population of 45 million with three operators, one of them, Cell C is even struggling to give chase to Vodacom and MTN, just like Zamtel.

Further, Government’s decision does not make business sense considering they own 100% shares in the industry lagger, Zamtel. The on-going turnaround of Zamtel will be frustrated such that Government will continue to pump money into Zamtel to keep it afloat. The move is gun shot in foot that will lose Government money. The ministry should be more interested in growing Zamtel as that will generate more money than what they would collect from the licences from two additional operators.

One thing we have to bear in mind is that voice call rates are already reducing world over, due to competition from social media platforms, streaming services and other internet based communication tools. It is interesting to see just how the market analysis took into consideration these dynamics. The important challenge the Minister should respond to is where he puts Zamtel and the money taxpayers have invested in the company, when we end up with 5 operators in a small market like ours.

RW

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3 COMMENTS

  1. My thoughts and many other progressive intellectuals, the ministry clearly has a gap in its mobile comms analytics. Ours is a very small market to be openning in such a manner, engage the 2 operators if you have concerns against some expert analysis(there are plenty seasoned telephony consultants in India & Europe). Meanwhile sort out Zamtel, how can it be failing while others are thriving & expropriating profit YoY. Expansion is not the answer, they should do some concentration strategies and don’t use them for expedience as low MoU at some sites is costing them.

  2. We need more than 4 mobile networks in Zambia for effective communication, because they will be competition among these mobile network companies and each company will be working hard to deliver better services for their customs which will increase the good performance in the network communication sector and these will lead to cheap airtime and other services provided by these network companies, which is better.

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