Generally, Zambia has often swung from one extreme to the other when considering the future of state enterprises. During the privatization era we hurriedly sold off many state enterprises that if re-structured could have still been around and well today. But because of our haste, probably due to World Bank and International Monetary Fund pressure, we converted state owned companies that had purpose, into assets and properties to be broken down and sold in various auction yards. The other extreme was to hang on to some state enterprises through 'hail and high water' and at the tax payer's cost without making any meaningful efforts to improve the productivity of these bloated giants. Zamtel, ZESCO, ZSIC, NAPSA, are some of the few remaining state companies that require some strategic and researched re-engineering so that they can continue providing the core services for which they were created, in a more productive and efficient manner.
Recently, ZSIC went through an internally motivated and managed re-designing program such that the company is splitting into three clear units that have specific core goals. We hope to see three separate companies that will emerge out of the ZSIC unbundling that will focus on the three main activities currently occupied by ZISC which are namely; Short and Medium Term Business, Long Term Business, and Properties and Investments. This proactive and locally developed evolution process is likely to result in the three arms of ZSIC becoming more efficient, productive, competitive, profitable, and sustainable with time. Hopefully, this formula should steer the ZSIC companies away from the auction yard.
Zamtel has similar characteristics to ZSIC because one can clearly identify five core functions within the company. The basic telephone service offered by Zamtel has always been landlines across the city. Zamtel has installed landlines in all major cities and towns and many telephone exchanges have serviced the communication needs of both the business sector and residential areas. This sector of Zamtel's operations can easily be turned into a standalone company.
All international phone calls in Zambia are routed through the Mwembeshi Earth Station where two satellite dishes continuously pipe information and communications across the globe via the satellite array in orbit around the Earth. This multimillion dollar investment can also be parceled out and formed into a separate company that will primarily buy and sell international communications connectivity and bandwidth for internet use.
Zamtel On-line offers internet services to the public and is one of the four largest Internet Service Providers in the country. Again, Zamtel On-line is clearly a division within Zamtel that can run as a separate company.
Cell-Z has always run as a separate entity under Zamtel. This was done to introduce competitiveness in the Cell-Z operations so that the mobile phone service could compete favorably with the other two privately owned companies in Zambia.
The last distinct development in Zamtel is the Fibre network that is currently being laid to cover the line of rail from Livingstone to Chililabombwe. This 1,500 kilometre fibre backbone can easily be incorporated into a separate company much like the Mwembeshi Earth Station but for national connectivity. The prospect for providing high speed connectivity to businesses and Governemnt departments are quite wide and opens up some new profit centres for Zamtel.
It is quite clear that Zamtel has already split itself into clear service centres and now needs to follow up by physically separating the various entities into separate companies with possible partners from the private sector. Zamtel may need some foreign investment partner for the landline telephone service, but Mwembeshi Earth Station will probably do better to offer some shareholding to local mobile phone service providers and internet service providers who both need fast and reliable connectivity to the outside world. Zamtel On-line can operate quite productively and efficiently with its current profile. As soon as Zamtel On-line is weaned from the parent company Zamtel, it should adopt some new strategies for sustained operations and profitability that will ensure its continued operations for years to come. Cell-Z will have to up its quality of service so that it can compete with the other two players in the industry. Cell-Z will have to introduce a more solid service in respect to international SMS services and international roaming. Many mobile phone users often use two companies to cater for their everyday uses. Cell-Z for local calls and landline calls, and one of the other mobile services provides to give them efficient SMS services to and from outside Zambia. There is a target to install a total of 4,000 kilometres of Fibre cable throughout the country. Opportunities exist for local partners to take a stake in this development through partnerships with the Zamtel Fibre Back Bone entity.
Hopefully, Zamtel will get it right and strategize its commercialization and privatization such that the transformation will be in the best interests of Zambia and will result in more productive and efficient services to the public.
Published 16 December 2008
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