Parliamentary committee proposes govt should take over US$280m Zamtel debt
By Staff Reporter
The Parliamentary Committee on Parastatals has recommended that government should consider shifting the US$280 million debt to the treasury.
Lufubu Member of Parliament Gift Chiyalika who delivered the report on behalf of the Committee said government should consider shifting the US$280 million debt to the treasury, which was acquired to implement the a project for universal accessibility.
Chiyalika said the Committee further recommends that the government should consider seeking a strategic equity partner for Zamtel that can offer financing to liquidate the other legacy debt in exchange for equity.
He said the Committee further recommends that a model be adopted where the Government will own 35% of shares of Zamtel to be listed on the Lusaka Securities Exchange and owned by the public while 40% shares will be owned by the equity partner.
Chiyalika said the Committee has observed that Zamtel had recorded positive growth in its revenues under the supervision of Industrial Development Committee.
He said Zamtel’s revenue stream increased from K641 million in 2015 to K674 million in 2017 despite the dip in revenues in 2016.
“2016 was a notably a difficult year for business owing to economic challenges, management restructuring could have adversely impacted operations,” the report stated.
Chiyalika said the Committee recommended that government should offer concessions on regulatory fees to Zamtel to reduce the operational costs incurred in implementing the Universal Access to ICT Project in unprofitable areas.
He said this was critical because Zamtel had to extend its mandate by rolling out towers to unserved and underserved areas of Zambia in order to ensure universal access coverage in line with the Seventh National Development Plan.
Chiyalika said the Committee acknowledged that Zamtel had introduced innovations in products and packages that helped improve its competitive edge in the market.
“However, the Committee further observed that Zamtel has received undue pressure from the regulator instructing it to cancel such products due to pressure from other mobile network providers. Other mobile network providers have un turn duplicated the same innovations and eroded Zamtel’s competitive edge,” he said.
“The Committee strongly recommends that ZICTA must formulate frameworks that should patent innovation from any player in the market. This will ensure fair competition and reduce replication of innovation.”