POTRAZ finally moves on licensing of ISPs and Mobile Virtual Network Operators in Zimbabwe (MVNOs)

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The telecoms regulatory authority in Zimbabwe (POTRAZ) has commenced consultations on the licensing of ISPs and Mobile Virtual Network Operators (MVNOs) in Zimbabwe. The regulator made the announcement this month that they have began accepting submissions from the industry on what should be considered in the creation of this new type of license category.

So far, Zimbabwe’s telecoms regulations do not recognise ISPs and MVNOs. Broadly, there only currently exist licenses for Internet Access Providers (Like Liquid, Africom, Dandemutande, Powertel etc…), Mobile Cellular Telecommunication Service providers (like Telecel, Econet and NetOne) and Fixed Telecommunication Service Licence (TelOne), and that’s about it.

POTRAZ says they hope ISPs and MVNOs will “raise the level of competition by providing consumers with a wider choice of service providers, a wider range of innovative value added services and more competitive pricing plans.” 

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There are companies that have been on the touch-line waiting for the green light on MVNOs, one of them a company we’ve written about here called Viva Mobile.

As a starting point, POTRAZ has provided a framework document which you can download here.

MVNOs

The few things POTRAZ has put in there that we picked up (just to give a summary) are:

  • There’s need to open up to other new types of licenses to increase competition and partnership opportunities for existing licensees
  • There’s need need for existing operators to respond to Over The Top services (industry term for WhatsApp and Facebook), the emerging Internet of Things, Machine-to-Machine communications as well as profit from emerging use cases in various industry verticals across the economy.
  • Proposed licenses are: Full MVNO (owns core network but needs MNO for other network segments)Light-MVNO (no core network, just has billing systems etc…), Branded reseller (just branding and distribution channels, like the old Firstel), Mobile Virtual Network Enablers (something that will host a number of MVNOs but cannot itself provide services directly to consumers)
MVNOs in Zimbabwe

Proposed structure & roles of MVNOs in Zimbabwe by POTRAZ

 

ISPs

Just as background on ISPs first.  In Zimbabwe ISPs currently don’t need a license to sell internet services. They however have to use the internet network of a POTRAZ licensed Internet Access Provider (IAP). For example ZOL is not licensed by POTRAZ; it just uses the network of a licensed company to provide services. That IAP in ZOL’s case is Liquid Telecom.

Yes, you could argue that ZOL is owned by Liquid and therefore licensed and you’d be right, but that was not always the case. ZOL existed for about a decade without a license (and without needing one) before it was acquired in 2012. In fact, in recent years, most ISPs have been acquired or they merged with IAPs. For example the ISP called iWayAfrica merged with the IAP called Dandemutande in 2015, and eventually the merged entity swallowed another ISP, YoAfrica, a few months ago.

Without a license, ISPs felt their future was bleak and that they had no option but to sell. The problem being that the IAPs that would wholesale internet services to them would also target the same internet end users (that is ISP customers) directly, leaving the ISP ill-equipped to compete.

To come back to the new proposals, POTRAZ now wants to license ISPs and the following categories are on the table:

Tier 1 – Internet Service Provider
This is an Internet Service Provider that does not own any telecommunications infrastructure but gets services directly from Network Service Providers, for resale. Tier 1 may be regional or national.

Tier 2 – Internet Service Provider
This is an Internet Service Provider that obtains its internet services from Tier 1 Internet Service Providers and has no direct access to Network Service Providers. Tier 2 internet Service Providers may be regional or national.

Consultations end on 30 April.

As an aside, there had been indications that POTRAZ was also working on creating a license category for infrastructure companies (like tower companies that lease out their towers to mobile operators) so that more infrastructure sharing starts to happen. We’re guessing this means that’s not a priority anymore.

About POTRAZ

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) is the regulatory authority of Zimbabwe's telecommunications sector and was established in terms of the country's Postal and Telecommunications Act Chapter 12:05. POTRAZ was established in February 2001 Read More

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4 Comments

  1. Charles Muzonzini says:

    This is a welcome development. More ways should be explored for making the telecoms industry more dynamic. This is a very important sector for the development of the country.

  2. Tinashe says:

    Ndokunonzi kuguma homwe dzese, kutsvaga mari kwese uku.

  3. DENDERA says:

    This is a welcome development as Zimbabwe nears saturation in terms of mobile penetration thus the cost of acquiring new subscribers become prohibitively high. MVNOs will open new segments that have been long abandoned by MNOs. As these telcos are heavily laden with debts the revenues from MVNOs are the “manna” they long for.

  4. LMMMMNT says:

    Just as much as they wish to set up these dubious licences others will just be exempt from them while being perennial loss makers, just look at Telone, NetOne, Telecel etc and noone with funds will pour into these bottomless pits, after all NO PARASTAL IN ZIMBABWE HAS A GREEN BALANCE SHEET.

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