Working under the banner of implementing widespread reforms in Parastals and State Enterprises, the government has decided to merge Postal and Telecommunication Regulatory Authority of Zimbabwe (POTRAZ) and Broadcasting Authority of Zimbabwe (BAZ).
Potraz’s function of overseeing the telecommunications sector and BAZ’s oversight function on broadcasting will be vested into a single regulatory authority.
Government’s rhetoric will obviously point out that the merging will be done to allay a significant amount of red tape and duplication of work. While it’s laudable when the government reduces red tape, it’s also good to see this latest arrangement from a business perspective.
Why does the merger make sense?
Business models are changing and industries are not as siloed as they used to be. . The business model that is being pursued by traditional telcos like Econet is the Technology, Media, and Telecom (TMT) model. If you have been following things you should have realised that Econet does not call itself a telecommunications company anymore, they call themselves a TMT business.
Telcos are progressively leveraging on data, telecommunications and technology infrastructure to venture into media content provision. In light of that, Telcos like Econet have grappled with the bureaucracy of BAZ to introduce Kwese, its broadcasting subsidiary while at the same time reporting to POTRAZ as the telecoms regulator. The merger of BAZ and Potraz could make sure this kind of entanglement does not happen since regulations would be coordinated.
How then should the BAZ and Potraz merger affect TMT?
With Netone trying to buy the digital dividend 2 years ago and Econet introducing Kwese, the appetite for media content by Telcos is increasing the need to harmonize their regulation. The new merged board should recognize the unique needs of the TMT model through streamlining the red tape that hampers Telcos from overlapping their services to media content provision.
But it’s very doubtful if the government instituted the BAZ and Potraz merging looking through this lens. Judging by my knowledge of Zimbabwe, the merger probably came through a mere copying of international best practice without a proper understanding of why things are moving that way.
If I am right about the motivations, this initiative could actually compound the current problems associated with regulation. I hope I am wrong.