POTRAZ is begging the government to prioritize it when it comes to foreign currency allocation so that it acquires infrastructure to increase network coverage in the country. POTRAZ Director General, Mr. Gift Machengete said;
…..we seek your assistance in securing the prioritisation of the sector in the allocation of foreign currency by the authorities……………the ICT (Information Communication Technology) sector relies heavily on foreign currency resources for network expansion, upgrades and maintenance……the sector can and should be notched up the priority list so that networks can be sustainable and consumers can continue to enjoy reasonable service quality…….
Foreign currency (forex) shortage is now a narrative that needs no elaboration in Zimbabwe. The government through the Reserve Bank of Zimbabwe has been struggling to adequately issue forex to companies who overly rely on it for their operations. Several companies are finding it hard to deliver products and services to customers because they have no forex to pay their foreign suppliers. So awful is the situation that some companies have gone for some months without receiving their forex allocation. Much of the forex has been directed to fuel import.
In the case of the telecoms sector, Mobile Network Operators (MNO) need foreign currency to buy infrastructure to construct base stations and towers.
The telecoms sector need for forex is even justified considering that many areas do not yet have telecommunication networks. Just several days ago, POTRAZ set up a base station in a remote place in Matebeland that had never known a network signal from local MNO’s. Its only possible to increase the connectivity if MNOs have the much-needed forex to purchase the equipment.
Besides purchasing infrastructure, MNOs need forex to pay for international internet bandwidth. International Internet bandwidth is the contracted capacity of international connections between countries for transmitting Internet traffic. As internet penetration increases so is the international bandwidth increasing and so do the MNOs need forex to pay for the bandwidth. The preceded quarter saw the total equipped incoming international internet bandwidth capacity increasing by 0.3% (to reach 102,950Mbps) as internet penetration increased by 1.3%.
2 comments
Here is my take; This is a service industry why is it up until now we don’t comment on failure by private sector to meet demands for both economic and non economic viable clients in the same light as all other sectors? It’s time tighter screws are screwed in on this sector as it is largely a drain and has no foreign currency generated on record for public scrutiny! We have no record of technology transfer let alone maintenance spare parts substitution industry, only to find them in the Que for foreign currency generated by others???? to a large extent 99% of the things they are importing can be made locally on physical infrastructure and support services. Is it not time for them to come clean on their foreign currency obligations versus what they have generated to date? Is it not time they become public listed companies with the public being the majority share holder?
Not so long ago the POTRAZ DG was boasting that “Zimbabwe is open for business”, what happened to that cry?
One other element, which I commented of the DG’s BS statement, is that there are interconnection fees that need to be settled in hard currency. All those outgoing calls that Zimbabwean businesses and individuals are making need to be settled in real money, while less people are making incoming calls, reducing the forex inflow…