The Government’s Double Dip: Why Ask Mobile Operators for More When the USF Should Be Enough?

The Minister of ICT, Tatenda Mavetera, spoke at the launch of the Matabeleland South Digitisation Roving Expo.

The gist of her speech was that the government is working to address connectivity issues. The country has made great progress toward a paperless and digitized economy. Several government departments will need to be equipped to handle the new digital transformation.

On digitisation, she said the government is “building the capacity of local authorities, especially Rural District Councils (RDCs), to be able to adapt to the new way of business.” To that end, 32 RDCs will be equipped in the first phase.

I mean, no one can really argue against digital transformation, except to hope that it’s done well and timeously.

The esteemed Minister also talked about connectivity. She acknowledged a problem:

We are alive to the communication challenges in the border areas and our teams are already making the necessary assessments so that work begins.

A number of border areas rely on foreign mobile network operators, as local operators have poor coverage there. This applies to many inland rural areas too, but unfortunately for them, they aren’t close to any foreign service provider’s cell tower.

The Minister said the government has set a target to rectify this, at least for the border areas. She mentioned they have given themselves until the first quarter of next year to achieve this. Probably a pie-in-the-sky target if you ask me, but I guess it’s ‘shoot for the stars…’ time.

The above is all par for the course in any political speech, but the nuggets came from her saying, “NetOne and Econet have already been advised to complement the government’s drive to expand and address connectivity issues in areas with deficiencies,” as summarized by The Herald.

What about Telecel?

Last time I checked, there were three mobile network operators in the country. I’m certain of this because the government’s own agency, POTRAZ, told me so.

If I recall correctly, the government has significant shareholding in two of the three. Yes, there are raging fights over who owns how much of Telecel, but the government remains one of the largest shareholders.

So, the fact that the Minister would only mention NetOne (the other service provider they own) and Econet speaks volumes.

Of course, this was a slip. Had she realized she was essentially confirming what we all know to be true — that it’s as good as having only two mobile network operators — she would have remembered to say, “and Telecel.”

But alas, apparently the government figured it was a waste of time telling its subsidiary to help in the endeavor. Telecel is not in a position to come through on this.

So, we now turn all our hopes to a UK-based shelf company taking over both Telecel and NetOne to ever expect anything from Telecel.

Enough with the extortion

Another thing that hit me is how our government takes a mile for every inch you give it. The Minister says NetOne and Econet have been advised to complement the government’s efforts. Why?

Why is the government asking them to chip in on this? Don’t get me wrong, I want to see border areas and other rural areas get better connectivity. However, the government has no right to ask NetOne and Econet to chip in.

The first reason is that the mobile network operators are not serving those areas well because it doesn’t make commercial sense to do so. Frankly, most of these areas are sparsely populated by low-income earners, which is why they are overlooked.

Before you call me stupid and heartless, I’m not saying this should remain the status quo. We already have a solution. The government knows that these businesses are not charities, which is why some areas are overlooked.

USF

That’s why the Universal Service Fund (USF) was created. It is an initiative managed by POTRAZ aimed at expanding access to telecommunications services across the country, particularly in underserved and rural areas.

It was established back in 2009, and its primary goal is to ensure that everyone, regardless of location or economic status, has access to basic telecommunications services.

As you can see, there already is a fund that exists to address the problem of some areas being underserved.

Pray tell — where does this USF get its funding? You’re not going to believe this — it’s funded by the mobile network operators.

The USF is funded through contributions from licensed telecommunications operators in Zimbabwe. These operators are required to contribute a percentage of their revenue to the fund.

The idea is that companies like NetOne and Econet benefit from access to a national market and should therefore contribute to the development of infrastructure that enables underserved areas to access telecommunications services.

So, the government already takes cold, hard cash — a percentage of revenue — from the mobile operators under the guise of improving connectivity in underserved areas. Then the government comes back, advising the operators to “complement” their efforts.

Its not chump change

Do take note of the amounts in question here. The government is not really transparent about the USF, but back in 2018, they told us there was $120 million in the fund.

At what point do we say the government has taken enough? I mean, the government makes more from Econet’s business than Econet does, for example.

Remember, there is a hefty price for a telecommunications license that the mobile operators have to pay. Part of the $137.5 million that Econet paid goes to the USF.

That’s in addition to the fact that licensing fees are also used to support the government’s initiatives for modernizing the telecommunications infrastructure across Zimbabwe.

So, why is the government going back to the goose and asking for more golden eggs?

My two cents

At the end of the day, we all want better connectivity, especially for the border and rural areas the Minister talked about.

But the government’s approach is questionable. They already have the USF — money taken from the operators to fix exactly this problem. So why are they going back to NetOne and Econet, asking for more?

The truth is, the USF should have been enough to make a difference by now. With well over $120 million sitting in that fund (it should be much higher since its six years since then), it’s hard to understand why we’re still talking about poor coverage in border and rural areas. The government seems to be asking the operators to do their job for them.

Rather than continually leaning on mobile operators (mostly Econet if we’re being honest) to fill the gaps, maybe it’s time for some transparency on how that $120 million in the USF has been spent and, more importantly, why it hasn’t been enough.

The government needs to deliver on the promises it has made without simply looking to mobile network operators to ‘complement’ every time there’s a shortfall.

If the money is there, it’s time to use it and solve these connectivity issues once and for all.

Also read:

• Telecel likely now earning less than 50c per customer per month despite growth in subscribers
• It’s a lie that Econet paid its licence in full, part of the payment actually made by people of Zimbabwe – Mandiwanzira
• Econet sues POTRAZ for $132 million, seeks reversal of tariff reduction & clarity on USF