The government has now put its Industrial Development Corporation of Zambia (IDC) who now has to source US$300-million needed to recapitalise the company and hopefully, grow it to more than the shell of telecoms past it has become.
The move to IDC is simply a transfer of working duties from but Zamtel still maintains its board of directors and management team.
What this will do for Zamtel
IDC will have more focus on Zamtel’s operational efficiencies than the ministries did. It would also make Zamtel management more accountable in terms of their performance. IDC could easily restructure these companies to maximise sweating of assets e.g. ZESCO fibre and poles for Zamtel to use to roll out its FTTH as opposed to Zamtel doing its own poles. Zamtel’s ability to source sovereign backed financing would be improved, as they now have been now put in charge of attaining.
Zamtel would benefit from having its issues heard by the IDC board chairman himself who is also the Republican President. Zamtel would use IDC to influence shift of government business its way. While operating independently, IDC companies could be each other’s clients, bank with ZANACO, insure with ZSIC, haulage agreements with Zambia Railways, nurses uniforms made by Mulungushi Textiles and communication with Zamtel considering they would have all services available in their portfolio.
Zamtel can use IDC to influence local authorities for a blanket SI for homes to allow Zamtel installations regardless of their service subscription status with them.
Zamtel’s thinking must be to use its home subscriptions (triple/multi-play offers) to commoditize mobile and make it difficult for other operators to make money using mobile only. Zamtel can maximise its total telecommunication capabilities to win more than just the mobile business. But this will need to come with a lot of modernisation investments and technology upgrades to its call centre, billing system, redundancy issues, etc.
This is what IDC would help facilitate, ideally. With a little under 2 million subscribers, Zamtel has the smallest market share and could collapse if nothing is done about its positioning and offerings in the market.
In a statement shared by IT Web Africa, Kapembwa Simbao – Minister of Transport and Communications said:
“We have handed over the running of Zamtel to the Industrial Development Corporation because we want this company to be run independently so that it becomes viable and be able to compete with other operators favourably.
We have reservations about maintaining the same management team, but let’s hope the operational side of things comes up with brilliant ideas that management will sign off. Have expectations of this shift? Share below.