Zim Government announces revised MNO license fees; it’s $137.5 million

The Zimbabwean government (and by that we mean the Ministry of Transport, Communications and Infrastructural Development) has finally announced what looks like the final position on the mobile network operator license fee increase. It’s US $137.5 million and the license is for 20 years. It’s an increase from the previous figure of $100m for 15 years.

The announcement was made in a statement issued by the Ministry’s head, Nicholas Goche. As you may know, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) falls under his ministry. The statement came just a day after the Finance Minister, Tendai Biti, announced that the government had approved new taxes on mobile network services and mobile banking. We have a post on that here.

Goche’s statement brings closure to the speculation in Zimbabwe about the increase of the license fees since information came out in March that the government was looking to increase the fees to $180 million, primarily to fund the country’s upcoming general elections. Then, it was also said by Biti that government would migrate the licenses to a converged licensing regime from a technology specific one.

That migration is not happening, says the new statement. The new license fees are for the mobile operators only, and “the scope of the license remain substantially the same as the current license.”

“This means the license will cover the range of services that are commonly referred to as 2G through to 3G” continues the statement. Yes, sounds very general, so maybe the terms of the actual license are more specific. Regardless, sounds quite expensive to have to pay $137.5m just to do voice and the internet when your competition can do both using the internet and paying just a fraction of the fees ($4 million). And the technology changes keep happening at an even faster pace! Or are they going to revise those upwards too?

As for the election funding agenda, Goche’s statement doesn’t go into that at all. It just says they made consultations and comparative studies at regional and international level before they settled on a figure that met “Government’s expectations”. On the very high possibility of this increase being passed down to consumers of mobile telephony & internet by the mobile operators, the statement is actually very silent. It only says they did consider that the industry needs to be allowed to flourish in spite of the increase.

The statement also says Econet Wireless, the largest telecoms firm in Zimbabwe, has already applied for a license renewal on the new terms, had it approved, and a 20 year license issued.

Here are the main points of the statement:

• The license fees have increased from $100 million for a 15 year tenure to 137.5 million for 20 years.
• In addition mobile operators will still pay an annual license fee of 2% of their annual gross turnover.
• They will also pay towards the Universal Service Fund of 0.5% of the annual gross turnover.
• They also pay spectrum fees (not specified).
• The license will cover “the range of services that are commonly referred to as 2G through to 3G”
• Services beyond that will require formal license adjustments. It doesn’t say if there will be any additional fees paid for this.

You can download the full statement here.