Here are 3 ways you will benefit from Infrastructure Sharing

While the debate on infrastructure sharing continues, I think the only clear sentiments from a lot of people who have been following it so far, are that the Minister of ICT is offside and Econet is being unfairly treated.

The truth is, these are misconceptions, and so far the biggest misunderstanding is that this drive for every operator to share infrastructure is an attack on Econet and that Econet is going to lose out of the arrangement.

The operators were not given a formula on how to share their equipment, they were simply put in a room and told to come up with an agreement of some sort which can then be endorsed by the authorities. The only response we seem to hear from that closed room discussion to date is “consultation”.

Just how long do these operators really want to consult on something that is practised the world over? If anything Econet, seeing as it has the largest stake to protect, should be leading these “talks” and pushing their agenda stronger if not short of imposing the terms of the arrangement.

If a politically polarised Zimbabwe had to, at some point, sit down in “talks” culminating in a functional GNU, what’s so esteemed about these telecoms operators that they cannot do the same?

advertisement

But I digress. To broaden the viewpoint of the stakeholders and aid the discussion, I would like to point out some irrefutable benefits of this practice deduced from the government’s tone during the recent Infrastructure Sharing Symposium.

Cost Reduction

The purpose of any business establishment is simply profit. The primary driver of Infrastructure Sharing  is the reduction of the costs of providing telecommunication services.

According to Mr Munodawafa who is a Southern Africa Telecommunications Association (SATA) executive, an estimated $8 billion in capital and operational expenditure can be saved across Africa and the Middle East if sharing is implemented.

Specific to southern Africa, between 16% and 35% reduction in costs can be realised immediately through reduced skills and resources requirement and unlocking value locked in the underutilised infrastructure.

How the operators will utilise whatever savings they can establish is their business, but the government has a few ideas. The current tariffs model which was approved by POTRAZ is mainly justified by the cost of providing service. This includes the human resources, the equipment deployed, the skills and training investment and so forth.

The government is happy with a situation where these inputs can be reduced in order to offer consumers lower tariffs. It is also happy with a situation where operators are not going to retrench employees citing the high cost of labour.

It is not just Econet cutting salaries and bullying suppliers, or Telecel paying employees in airtime however, regionally telecoms is also showing signs of stress as competition toughens. Telkom South Africa intends to lay off more than 7,800 employees directly and through its suppliers. The loss of jobs is a situation the governments of these two countries are not happy about.

Infrastructure Spread

At some point in 2000, the Universal Service Fund (USF) was created through an Act of Parliament with the intention of providing uniform service across Zimbabwe. This was after the realisation that all operators have a duty to ensure that infrastructure is rolled out uniformly including to the rural areas.

Operators contribute 0.5% of their revenues towards this project. If operators are allowed to just focus on making money they would probably concentrate only in highly populated urban areas and discriminate against our rural folk.

There have been reports that some operators are failing (deliberately or due to inability) to service their obligations to the USF. If this is true, they are disadvantaging a project that could have benefited the generality of Zimbabweans.

Understandably, no operator would want to carry the cost of deploying equipment in Machonyonyo where there is no guarantee of return On Investment. If Infrastructure Sharing is established, this cost does not have to be carried by one party but can be shared proportionally among the players.

Network Maturity

There is a general belief that the current networks (partly because of duplication) are not fully utilised and fully optimised. Infrastructure Sharing will eliminate duplication of base stations in the same area and deploy them in areas where there is a need.

At the same time, active sharing will allow these same networks to maximise capacity utilisation by carrying Virtual Networks on the same infrastructure including even the data centres, antennas and so forth.

The opportunity and vacuum created through sharing will stimulate growth in the sector especially with service innovation and provision of OTT services.

There is room, compounded by the coming of digitisation in broadcasting, to provide triple play services as an example. Econet has been singled in the past for wanting to provide all possible services in-house while stifling any external and upcoming players.

Infrastructure sharing, depending on the model, is somewhat anti-monopoly and will allow for new entrants with new services to lease the infrastructure and penetrate the market.

Whether the method is right, the government does have some compelling arguments.



17 Comments

  1. Tapiwa✔ says:

    *sigh* I don’t know if the author enjoys being contrarian or enjoys flogging this particular dead horse.

    For 14 years, operators (at least some of them)/have poured millions of dollars into the Universal Service Fund which was supposed to develop shared infrastructure (yay). This government fund was looted and to date no one has been held accountable.

    The government isn’t going to let the fees be set without interference (because they are a player and the ref). Net payment flow will be to Econet so they’ll want it to be as cheap as possible.

    In addition, the same Telcos that failed to pay their share of the USF are the ones that failed to pay their interconnect debts- that’s 2 strikes. It doesn’t take a rocket scientist to figure out they’ll also default on their infrastructure sharing dues. If I were Econet (or any private player), I’d want nothing to do with this nonsense too: I’d be happy to watch the incestuous Gvt-only infrastructure sharing from the sidelines.

    The timing is a little curious: a few days after the ultimatum, a gvt-owned entity with no GSM infrastructure announces it will be ramping up. Must be a coincidence./s

    1. Evans says:

      Econet would hide behind that but we all know that they wouldn’t want to compete on services. They only have one competitive advantage of capital and dominance and they wouldn’t want to lose that.

      1. Tapiwa✔ says:

        You say it like it’s a bad thing. Ofcourse it’s a competitive advantage that they worked hard at and paid for in full.

        Why should ‘services’ be the battleground for competition? Because a minister says so? In a free market, the customers decide the winner, not a player-slash-referee

    2. Paida says:

      I think infra share is the way to go, coz obviously as consumers we want value for money. if we look at it the operators are still meeting the maintenance cost and for them to give better data services there still is need to built more towers and if this is to be relieved of them then maybe we might get to a point of paying a dollar for a day wifi connection.

  2. macd chip says:

    I now believe this writer is being sweetened by the someone to flog this dead horse!

    As a writer you should be asking hard questions and clearing dark corners rather than telling us what we all already know. There are more than 3 ways we can benefit from sharing.

    But before we get there, why can not you ask your buddies at the ministry that:

    1. What happened to all the money which has been paid by telcos for last many years?

    2. Who have been paying and who have not been paying.

    3. Who is going manage the sharing and why

    1. Evans says:

      Most of your questions can only be answered when people sit round the table and talk about the sharing. The problem is some are not even interested in he talks at all.

  3. david says:

    Can you guys stop criticising the author.
    This is a personal blog, he can write what ever he wants no matter how accurate or inaccurate it is.
    If you guys know so much, make your own blog.
    I believe you guys are older and mature then the writer, why don’t you go ask government what they did with the USF money. Instead of hiding behind your screens and make noise

    1. macd chip says:

      l didnt know that Techzim is a personal blog let alone owned by him. If its now personal blog, then Kabweza needs to change this and reflect the desire of new owner:

      http://www.techzim.co.zw/about/

      1. david says:

        let me rephrase that for your pompous self.
        “This is a private news blog. They can write what ever they want …”

        1. macd chip says:

          Maybe you didnt read it all:

          …This means that we will always communicate facts and report without fear or favour. This means that we will not report or feature something/someone because we are dying for content.

          1. david says:

            Dude you kill me. Yes i did read it all. Did you see what you quoted “communicate facts and report without fear or favour.” Are you contradicting that you did not accuse the author of favouring his govt friends

            1. macd chip says:

              Obviously the author is floging a dead horse which was my point and there are no facts in his story!

      2. rofl!!! ndisiyeyi zvangu

    2. Tapiwa✔ says:

      Can you guys stop criticising the author
      How about ‘no’? The *owners* of the blog intentionally enabled comments so that we can have this dialog. If the author is can’t handle his opinion being challenged, he should quit the writing business.

      I can’t say I’m surprised that you are unable to address the questions raised, ‘David’.

      1. david says:

        Which questions. if you talking about the ones macd chip raised, you already answered the first 2 questions in your first comment.
        The third you answered also in your reply to evans.

        By the way do you work at econet ?

        1. Tapiwa✔ says:

          All the questions, including mine.

          No, I do not work for Econet (check my comment history). I don’t need to be feeding at the trough to pick a side, which can’t be said about everyone (*caught* supa *caught*).

          By the way, are you the author?

  4. david says:

    Just to clear the air we should all stop taking sides as we not going to get paid from econet or vice versa from govt. Rather concentrate as the end consumer how we benefit. I will be no more commenting on this story so those interested can have a go a my comments

Leave a Reply

Your email address will not be published.