CAN YOU HEAR ME NOW?

Zambia 2017 | IT, TELECOMS & MEDIA | INTERVIEW

As Zambia continues to transform its IT and telecoms sector, industry analysts and public and private stakeholders are confident that the development has the potential to revolutionize the economy.

Zambia's ICT sector reordered stellar growth in 2016, expanding YoY by over 40% and accounting for 1.2% of the country's overall 4% GDP growth, according to the country's Central Statistics Office (CSO). Industry observers expect more big things from the country in 2017. With subscription rates increasing in a number of key areas, the country's ICT sector looks extremely strong moving forward, and leaders in the public and private sphere are anticipating more record-setting growth.

Beginning in the early 2000s, Zambia has tried to develop its ICT sector with a clear and focused policy framework. Since 2007, they have been implementing this framework, known as the National Information and Communications Technology Policy, and they continue to make great strides. The eventual goal of the policy is to develop a knowledge economy by 2030, grow public access to the ICT infrastructure, design and implement an appropriate ICT infrastructure and roll out widespread e-government and e-commerce capabilities, according to the United Nations Development Program. For Zambian ICT, 2009 was another watershed year, and this year witnessed the introduction of the ICT Bill, which paved the way for new regulation and activity; the Communications and Technologies Act, which gives the government greater purview in ensuring the enactment of the National ICT policy; and the Electronic Communications Act, which aims to create a secure and reliable electronic ecosystem for all stakeholders in Zambia. According to Zambia's Revised Sixth National Development Plan and the National Vision 2030, ICT and science and technology development will be core areas of focus, and internet access, e-commerce, e-agriculture, e-health, and e-education are set to dominate the agenda.

While there has been slow uptake in terms of fixed line penetration, mobile technology has been the key driver of growth, though certain obstacles remain. High prices have remained a key limitation for many Zambians looking to connect themselves, and this barrier to entry applies to mobile devices, fixed-line devices, personal computers and internet capable smartphones. Though individual usage is low—but growing steadily—ICT technologies have been deployed to a somewhat greater degree within the business community.

According to the World Economic Forum's Global Competitiveness Report (WEF) for 2016-2017, Zambia has 74.5 mobile telephone subscriptions for every 100 people and 0.7 fixed-telephone lines for every 100 people in 2015 compared to 67.3 mobile telephone subscriptions per 100 people and 0.8 fixed telephone lines per 100 people in 2014. As with most developing countries, mobile access has been growing sizable in recent years, while traditional fixed lines have grown more and more obsolete. The major gains, however, have been in internet usage. Between 2014 and 2015, the percentage of the population using the internet grew from 17.3% to 21% and mobile broadband subscriptions per 100 people jumped from 1 to 13.8. Bandwidth exploded, and in the same period kb/s/ user grew from 4.2 to 125. According to the 2016 figures from the Zambia Information and Communications Technology Authority (ZICTA), there are 12,017,034 mobile subscriptions in the country, representing a penetration rate of 74.93%; 101,407 fixed line subscriptions, representing a penetration rate of 0.63%; 5,156,365 mobile internet users, representing a penetration rate of 32.15%; and 35,919 fixed line Internet subscriptions, representing a penetration rate of 0.22%.

Additionally, Zambia was ranked 116 on the WEF's Network Readiness Index for 2015, but it was ranked 61 in terms of its political and regularity environment and 39 in terms of its business and innovation environment. Its business usage was ranked 71 overall, while individual usage came in at 126 and governmental usage was 104. In terms of the economic and social impact information technologies have, Zambia is still ranked relatively low at 115 and 111, respectively, but improvements are being made. In terms of rankings, overall network readiness has been a bit unstable in recent years, but serious strides have been made in certain areas. Zambia's regulatory environment for information technology has improved dramatically, and the country is ranked 37 in legal system efficiency in settling disputes, 48 in challenging regulations, and 46 in intellectual property protection. Affordability remains an issue, and Zambia ranked 118 in prepaid mobile cellular tariffs, 131 in fixed broadband internet tariffs, and 96 in internet and telephone competition.

Some strides are being made in this area, however, and renewed competition amongst Zambia's three major data providers has stimulated a fall in prices. With growing adoption of smartphone technology, Zambia's three major data providers, Airtel, Zamtel, and MTN, have put a dent in prices. These three companies account for the vast majority of data services in the country—MTN controls 45.5% of the market, Airtel has 40.1%, and Zamtel has 14.4%—and they continually vie for the country's nearly 6 million internet users. Mobile network operators employed almost 1,400 people in 2016 and generated revenue of almost ZMK 4.5 billion, according to ZICTA.

Another key area of improvement has been in government usage, and Zambia ranks 57 in importance of ICT to the government's vision and 68 in governmental success in ICT promotion. The government has been developing and executing plans to deepen the penetration of technology into the lives of all Zambians, and it has been focusing particular effort on leveraging the private sector's know-how to improve usage rates. In an exclusive interview with TBY, Samson Longwe, the Managing Director of Hai, enumerated some of the ways the government has bolstered the industry. “Broadly speaking, the Zambian government supports the development of the ICT sector," said Longwe. “Indeed, the government is at the core of promoting e-governance—for example, both tax payments and the public procurement systems are now digitalized—and it is expected that this in turn will create demand for our services from the public. From a regulatory and fiscal perspective, in the last two years the government has continued to offer incentives to boost the ICT sector." These incentives have included lower import duties for ICT-related goods. However, Longwe is quick to caution that more can still be done, particularly in the areas of corporate tax and regulatory fees.

The Zambian government has continued to make strides in terms of making the country as attractive as possible for international investors and major multinational ICT firms. In an exclusive interview with TBY, Lars Stork, CEO of Vodafone Zambia, described the work Zambian stakeholders have put into the industry. “Zambia has undertaken rigorous and institutional reforms aimed at improving the attractiveness of the country to investors. From an ICT perspective, Zambia steadily continues to establish itself as an attractive investment destination in Southern Africa," said Stork. “With the immense talent pool in Zambia, its geographical position, plus favorable investor policy framework, the nation is in a position to become the Silicon Valley of Southern Africa—a truly technological hub driving the nation and the region into a bright digital future." By supporting the natural appeal of Zambia to international and homegrown investors, stakeholders of all kinds can serve as catalysts in developing Zambia's ICT ecosystem and knowledge economy.

Industry leaders are excited about the implications of the new Pan-African network for the Zambian ICT sector, and they foresee it having widespread positive impacts on the industry. Samson Longwe explained the importance of the network on Zambia. “By being more connected, the continent can develop at a faster rate," said Longwe. “Traditionally Africa sold its primary products to Europe and other markets, but it is expected that ICT will help provide more opportunities for intra-African trade. It is also high time in Africa to start adding value to its primary commodities in Africa and, with interconnectivity, the opportunities to do so will materialize." Leaders in Zambia's ICT industry expect big things from the pan-African network.

The domestic network is also expanding at an impressive rate, and MTN has built 163 Evolution 4G sites across the country, and it plans to complete 68 more in the near future. Additionally, the company plans to develop its 3G network even further, expanding its current infrastructure from 769 3G sites to 881 by year-end, according to the trade publication ITWEB AFRICA. MTN hopes to utilize its expanded network to capture more of market share, improving its already dominate position.

A new but integral driver of ICT growth in Zambia has been the proliferation of mobile banking. Though the majority of the Zambians have traditionally gone unbanked, new technologies are bringing finance to the masses. In an exclusive interview with TBY, Charles Molapisi, CEO of MTN, discussed the ways mobile banking and financial services are changing the ICT landscape in Zambia. MTN has more than 420,000 customers using its mobile money service, transacting more than USD800 million dollars a month. “We believe we can reach USD3 billion worth of transactions by the end of 2017 and 1 million customers," said Molapisi. “We are empowering Zambian citizens with financial tools and also supporting the government's efforts to increase financial inclusion." Innovative, market-changing platforms like MTN's mobile money system are transforming the IT space in Zambia, bringing the country to the fore in terms of development and penetration.

While progress has been made, Zambia's IT and telecoms industry has room for growth and improvement. Stakeholders in Zambia are working to develop the necessary infrastructure to transform the economy into one that is knowledge based. As the country continues to develop its innovation agenda, IT and telecoms are set to remain a priority.