Digital migration project in funding crisis after NetOne fails to pay Government $200 million for dividend spectrum

Nigel Gambanga Avatar

The Zimbabwean government is in the process of identifying new buyers for the digital dividend spectrum which was initially sold to local mobile operator NetOne after the mobile operator failed to pay the $200 million required for it.

This information was shared by the Miniter of Finance Patrick Chinamasa in an update on the funding of the digitalisation project to the portfolio committee on Media, Information and Broadcasting Services.

Digital dividend is the radio spectrum that is freed up after a migration from analogue to digital broadcast. Zimbabwe’s digital spectrum is handled by the telecoms regulator, POTRAZ.

In 2014 when the government needed to secure funding for the digital migration project it offered NetOne this digital dividend spectrum at a discounted price of $200 million. This would have been adequate to meet the $172,9 million required for the project through an off-budget facility. 

NetOne was expected to acquire a loan from the market to put this into effect but it failed to honour the obligation. As a result, the project has been underfunded and the government has had to look for other buyers who are willing to take up the spectrum.

At the moment progress on the digitisation project has been stalled with $19 million urgently required to pay the project’s contractor Huawei. According to Chinamasa, the government has had to provide bridging finance as it secures another buyer for the spectrum with enough capital to match the price.