Infrastructure Sharing: This One Thing Can And Should Be Finalised In 2018

Most of us are a little optimistic about the future of this country of ours. We are hopeful that things will change for the better in the coming year as we get ankle deep into a new president’s administration.

We may be optimistic but we still are realists, we know the kind of mess the president inherited and we know it’s not the kind of mess that can be fixed in just a few months.

We have seen the reports from research firms and other international bodies saying that we will probably start seeing meaningful change in 2019, after the elections. The international community will only fully engage with us after observing the election process next year.

They are entitled to do whatever they want but we can’t wait for them if we are to start rebuilding this country, or at least to finally commence or finish what we started or should have started way back. We have projects and ventures that have been in the pipeline for too long.

There is one such thing which has been discussed over and over and yet we are yet to see progress.

Infrastructure sharing

Sharing of infrastructure by the telecoms operators. We need this finalized as quickly as possible. There has been a stalemate for a long time. A Statutory Instrument was passed introducing compulsory infrastructure sharing over a year ago but nothing has been done yet.

While all players understand the benefits that will accrue, there are considerations that have to be taken into account and this has slowed the process.

Econet, a non-governmental entity, owns the majority of the infrastructure and any sharing plan should provide for adequate leasing fees. The other players which will have to pay the leasing fees are governmental entities, and Econet has had problems recovering monies owed by the same entities in the past.

As some have suggested, a sure way Econet can ensure it gets leasing fees for the billion dollar infrastructure they constructed would be to get a deal which reduces their tax obligations rather than to have to collect from Netone and Telecel.

Such an arrangement is likely not possible, an organization getting tax breaks or import rebates instead of payment from a parastatal? I’m no expert in this but this seems like wishful thinking. Are parastatals the same as the government? No, and let’s look at what Mandiwanzira had to say in the past.
Regarding the issue of Econet’s licence fees which they claimed to have paid in full, Minister Mandiwanzira said,

What Econet did was that it negotiated with Government that “Oh, by the way, as we are renewing our licence we are owed money by NetOne and we are also owed money by TelOne. Can you as Government take over those loans, those amounts which were accumulated in their day to day operations between their business entities.” They then asked the Government to take over that liability and pay to POTRAZ the licence fee. That is the truth of the matter. $60 million was paid by the people of Zimbabwe, not by Econet.

So it is clear that parastatals are not the same as the government and that’s where infrastructure sharing plan comes stuck. How much is to be paid to Econet as leasing fees and how will it be paid? We will likely see a scenario where Econet is owed millions in licensing fees with no way to collect.

All this while Netone and Telecel get to use infrastructure for which they did not have to borrow boatloads of money to erect like Econet did.

In Mandiwanzira’s quote above it is clear that the government was not too thrilled about having to take over Netone and Telone’s liability. That is because everyone knows that that $60 million debt was as good as a bad debt.

Unfortunately that is not the only time that Econet has failed to collect their dues from the parastatals. At one point Econet mulled disconnecting Netone over unpaid interconnection fees and there was an outcry and Econet were portrayed as a bully and villain. How will they collect from the same entities now?

The government at the same time relies on taxes collected from Econet, what with them being the biggest taxpayer in the land. So such an arrangement would not be to Chinamasa’s liking. The government recently all but said that Netone is a disappointment and they are not about to lose out on potential taxes and have to collect that money from Netone.

However they solve the problem we want the benefits this coming year. Lower capital expenditure and operational costs for telecoms operators could lead to lower costs for us as consumers. The lower capital expenditure should help in reducing the foreign currency needs as most of the infrastructure is imported. This will help with our little cash shortage situation.