Maravi

Why is Zamtel after Zesco's optic fibre?

Why is Zamtel after Zesco's optic fibre?
By The Post
Thu 05 July 2012, 13:25 CAT

THERE is totally nothing wrong with the state, the government running business enterprises. What is wrong, however, is for the state, the government not to run its business enterprises well, in an efficient, effective and orderly manner. Democracy implies no specific doctrine of economics. Indeed, a good deal of debate in any modern democracy concerns the proper role of government in the economy.

No contemporary democratic state has an economic system that is either completely state-owned or totally free of government participation or regulation. All are mixtures of private enterprise and government oversight.

Over the last two decades, our people have been bombarded with neo-liberal propaganda; they have been told that the government has no business in business. For some time, the political leadership of this country, and even civil society, seemed to have swallowed this without chewing.

In this world, things are complicated and are decided by many factors. We should look at problems from different aspects, not just from one. We must learn to look at problems from all sides, seeing the reverse as well as the obverse side of things. In given conditions, a bad thing can lead to good results and a good thing to bad results.

Many developing countries that are doing very well economically have got a state, a government that is participating efficiently and effectively in the economy.

Whether one likes it or not, the economic advances that China has made and is continuing to make, are as a result of the state, the government participating in the economy efficiently, effectively and in an orderly manner. The enterprises that have enabled China to accomplish what it has accomplished and to do what it is today doing in the world are state enterprises.

The same can be said of Brazil, Singapore, Iran, South Africa and India. The biggest airline in the world, Singapore Airlines, is a state-owned enterprise. The biggest telecommunication company in the world, Singapore Telecomms, is also a state enterprise. South Africa still has many state enterprises in its most important economic sectors.

Clearly, there is a lot to benefit from state enterprises. But there are prerequisites to any such successes. The state, the government cannot, itself, run efficient business enterprises if it is not, itself, being run efficiently, effectively and in an orderly manner. Singapore is able to run efficient state enterprises because it's got one of the most efficient civil services, and public sector in general, in the world.

The same can be said of China. For whatever ideological concerns one can have with the way China is politically governed, one cannot deny that the state, the government in that country of 1.3 billion people, covering a territory of 9,596,960 square kilometres, is efficient, effective and orderly. And this is the foundation, this is the base on which that vibrant economy is built.

Equally, in a state where the public sector is inefficient, ineffective and disorderly, the private sector also suffers; it can't do that well unless it becomes parasitic on and exploitative of the state.

With these brief observations, we come to the issue of the Zesco optic fibre network which Zamtel is trying to appropriate at no cost. Of course, both Zamtel and Zesco are state-owned enterprises with a clear mandate on what they should do. Zamtel invested over US$50 million in its own optic fibre network. Zesco borrowed US$70 million to invest in its own optic fibre network. That loan is a long-term facility which is yet to be repaid.

Why should Zamtel be handed over the Zesco network for nothing? Where is Zesco going to get the money to repay the US$70 million it borrowed for this network? We hope they are not expecting Zesco customers to pay this loan through increased electricity tariffs when this optic fibre network could bring in adequate revenue for the repayment of this loan!

Moreover, Zesco put up this optic fibre network to increase the security of its electricity supply lines. It is only a small surplus that it will run in a commercial way. Why deprive Zesco of the benefit of its efforts to cut costs and improve efficiency?

Of course, one can argue that the state, the government needs to rationalise its investment in the two companies by avoiding unnecessary overlaps, duplications. There is totally nothing wrong with state enterprises competing against each other. This is not irrational.

In China, it is not uncommon to find the state owning a number of companies in the same sector and having these companies compete against each other, in certain respects. For instance, the Chinese government owns at least four big enterprises in the telecommunications sector - ZTE, Huawei, China Mobile and China Unicom.

And even in our region here, the SADC region, we have the South African government having three state enterprises offering telecommunication services - Infraco, Telkom and Sentech. We are confident that many other examples of similar arrangements are there in our region and in the world.

Moreover, why try to create a state monopoly over the optic fibre network when Zesco and Zamtel can provide us the necessary competition? We don't think this will be in accord with the requirements of the consumer protection and competition Act. The Act doesn't exempt state enterprises from its provisions.
There is no need to move back to the methods of state enterprises that failed us.

We don't need one state enterprise to provide a service that can be provided by many state enterprises in competition with each other. We all know where such monopolies lead to - inefficiency, ineffectiveness and poor provision of services.

There is no problem in Zamtel and Zesco owning their own optic fibre networks and running them in competition against each other. There is enough room for each one of them to manoeuvre and the market is not saturated. Competition between Zesco and Zamtel in the optic fibre network is necessary and beneficial to the nation and to the consumers of this service.

Moreover, Zamtel should account for its US$50 million investment in its optic fibre network. If it has nothing to show for this money, then those who were responsible for this investment should be called upon to account wherever they may be.

We know there has been strong lobbying by people with vested interest for Zamtel to take over the Zesco optic fibre network. But let those in government leadership serve the interests of the people wholeheartedly and never for a moment divorce themselves from the interests of the masses, and proceed in this matter, as in all matters, from the interests of the people and not from one's self-interest or from the interests of a small group.

Labels: OPTIC FIBRE, ZAMTEL

posted by MrK @ 8:10 PM