Zambia ICT Sector Performance Review 2010 - Research ICT Africa

Zambia ICT Sector Performance Review 2009/2010
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
Mobile
Fixed
Internet
1,000,000
500,000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009
Figure 4: Mobile, Fixed and Internet Customer Growth Trends
The fixed-line network is highly skewed towards urban areas, which account for close to 90% of the
PSTN subscribers, but only 55% of the country's population. The network is concentrated in Lusaka
and Copperbelt areas, which account for around 50% and 30% of fixed lines, respectively, but less
than 38% of the national population. The rural areas, with more than 60% of the population enjoy
less than 10% of the fixed lines available. At present, the active fixed lines in Zambia are evenly
distributed between commercial and residential subscribers.
More than 80% of ZAMTEL's transmission network is digital. A number of microwave trunk routes
carry traffic to major provincial centers. A digital optic-fiber backbone linking Lusaka and
Livingstone is being installed as part of ZAMTEL’s network upgrade. Traffic to medium-sized towns
and rural areas is carried via microwave links that also provide interconnection with neighboring
countries where applicable.
Chinese equipment supplier Huawei has been building the company a fibre backbone, but it is far
from complete. Financing constraints have delayed completion of the project considerably.
In spite of its monopoly status, as at end of 2009 ZAMTEL had fewer than 100,000 fixed and fixedwireless
subscribers over the last 40 years and, since 2006, it has lost over 10,000 subscribers. While
the two major private operators, namely Zain and MTN, had over 3.5 mobile million subscribers
between them, Zamtel has fewer than 200,000 mobile customers. In 2008, Zamtel registered a ratio
of 110 subscribers per employee compared to 586 – the average subscriber base per employee for
sub-Saharan African telecommunication operators.
Zamtel’s bloated cost base, largely because of its large headcount, has led it to insolvency. In order
to save the company from liquidation, the government opted to privatise Zamtel (see below).
The fixed-line network
is highly skewed
towards urban areas,
which account for
close to 90% of the
PSTN subscribers, but
only 55% of the
country's population.
Zamtel’s bloated cost
base, largely because
of its large headcount,
has led it to insolvency.
Privatisation of Zamtel
The Government has recognised that the ICT sector in Zambia has the potential to make significant
contributions to economic growth. As a result, it has resolved to fully liberalise the
telecommunications sector and is taking further steps to promote Zambia's international
competitiveness by removing barriers to doing business as part of the private sector development
reform programme. These actions include eliminating Zamtel’s monopoly on the PSTN and
international gateway as well as reducing license fees to regional averages.
In December 2008, the government announced its intention to partially privatise Zamtel through
the sale of 51% to 75% shares in the company’s equity. The government intends to retain a
minimum of 25% of Zamtel’s equity, and reserves the right to list some, or the entire stake on the
Lusaka Stock Exchange.
In a speech to Parliament in August 2009, the Minister of Communication and Transport revealed
that Zamtel had an annual operational deficit of US$17 million, liabilities in excess of US$125 million
In December 2008,
the government
announced its
intention to partially
privatise Zamtel
through the sale of
51% to 75% shares in
the company’s equity.
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