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Telecoms Sector Contemplates Privatizing Parastatals

MUTARE– The national telecommunications regulator Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) , is warming up to the idea of privatization of state owned enterprises under its ambit, to boost competitiveness and capacity of players in the sector.

POTRAZ director general, Dr Gift Machengete recently made an appeal to cabinet to consider partial privatization of parastatals and a converged licensing framework.

Dr Machengete said government should make deliberate policy decisions, including weaning off some parastatals to curb unfair competition in the sector as well as reforming the regulatory framework.

He said the regulator operations and projects have been hampered by the transition from USD to local, appealing for government to assume its legacy debt when it was still Postal and Telecommunications Company (PTC).

“We motivate for partial privatization or merging of state owned telecommunication companies…we would (also) like Government to take-over the legacy debt inherited by POTRAZ from the former PTC.

“The barriers to entry into the ICT sector coupled with lack of capacity by state owned telecommunication companies to compete effectively, has led to unfair competition which leaves consumers vulnerable to manipulation and abuse,” he said.

Dr Machengete said PORTAZ is looking ‘beyond the era of convergence’ and was already planning for licensing and regulation frameworks of the future, abreast with technological advancement.

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“The regulation framework has been lagging far behind technological changes, hence inadequate to spur the country into a digital economy. POTRAZ, therefore, needs to be capacitated with adequate and relevant regulatory tools to deal with emerging issues such as cyber security threats and data protection,” he said.

Minister of ICT, Dr. Jenfan Muswere said rapid changes in the technological space have compounded regulatory challenges in ICT sector

He said POTRAZ should drive expansion of network coverage to underserved areas, improve access to ICTs by people with disabilities and special needs, as well as driving e governance towards smart human settlements.

“We need to catch up with technology, in particular 5G, for which we need a road map and strategy or else we remain digital laggards.

“We want a POTRAZ which anticipates future technological changes and prepares the sector in advance, to harness the new technologies for the benefit of the country,” he said.

Some state owned companies operating under POTRAZ include, Tel One communications, Net One Cellular, Powertel and Zim Post among others.

Parastatals have been flagged, by the Auditor General Mildret Chiri (2018) as a source of hemorrhage of state funds, noting with regards to POTRAZ that it did not comply with the requirements of International Financial Reporting Standards 18 (IAS 18) as it did not accrue all its revenue.

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The audit findings warrant the attention of management and those charged with governance. The audit revealed that most of the weaknesses emanated from governance issues.

“Governance issues have continued to dominate my report constituting 80% of my total findings as depicted by the graph below. Most governance issues centered on absence of good stewardship over public resources,” read part of the report.


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