POTRAZ $60 million passive infrustructure project uncertain

Zimbabwe’s telecoms regulator POTRAZ has yet again hit a snag in delivering the infrastructure due through the Universal Services Fund (USF) collected from telecom providers annually, according to a report in the Business Herald. The Universal Service Fund is money contributed to by all licensed telecom operators, part which is to be used to fund the rollout of passive telecoms infrastructure in under-served areas in the country.

In 2012, Potraz had only managed to install 11 base stations amid reports that the regulator had collected $43 million for the USF since dollarisation in 2009. Back then, the reason for this slow pace in rolling out infrastructure was that back then, the money  was simply not enough. This was at a time when operators contributed 2% of their annual gross turnover to the fund.

Things have changed now. According to the Herald report, operators successfully negotiated to have the USF negotiated downwards from 2% of their annual gross turnover to only 0.5% and the roll out of infrastructure is still, and likely to continue at a really slow pace.

The reason why POTRAZ finds itself in this position is that operators, led by Econet, have always been dissatisfied with the slow pace at which the USF had been utilised and there had been calls for it to be scrapped altogether. This undoubtedly may have gave operators an edge when it came to negotiating the reduction of the USF from 2% to 0.5%.

Quoted by in the Herald, Potraz acting director general Mr Alfred Marisa said, “At the current levels of collections from licensed operators; these projects alone would take more than seven years to complete (In 2012 it was supposed to take 2 years to complete) and yet, in terms of making ICTs readily available to the majority of citizens, this is just a drop in the ocean,”.

Assuming revenues has stayed flat for operators, POTRAZ now has less than a quarter of what they used to work with to implement a project that’s far from completion. The hope is that they still have money form the previous years.

To be fair on POTRAZ, the Herald report suggest that government bureaucracy is also causing slow implementation of POTRAZ’s plans for the USF. The article cites “delays in getting State Procurement Board approvals for projects, the requirement and need to consult operators on disbursements of funds, consulting affected stakeholders and Government”.