Zambia Invites Bidders for 4th and 5th Mobile Network License

Zambia has opened up its market for for a fourth and fifth mobile-network licence to take on operators including market leader MTN in the Southern African country, transport and communications minister Brian Mushimba said. Earlier in the year Zambia adopted a converged a licensing framework that eradicated all barriers to entry narrowing all licensing requirements to two categories namely service and network. What this entails is that the nation will see influx of service providers that would ultimately lower unit data and voice call costs.

Last week, the ministry gave the go-ahead to the telecommunications regulator to start the process, he said in a recorded response to questions on Monday. The new carrier could be in place over the next 6-12 months and the country may even have capacity for a fifth operator, he said. The local unit of India’s Bharti Airtel and state-owned Zamtel make up the current trio.

Communication costs in Zambia have been “rather on the high side”, Mushimba said from Lusaka, the capital. “The market analysis that we have done supports the fact that we can have a fourth licensee and possibly a fifth and still the market will be profitable.” Zambia sells data for over $14 a gig compared to its peers in East Africa such as Tanzania that sell for under a dollar a gig at $0.9. It is for this reason that the Zambia Information and a Telecommunications Authority – ZICTA adopted a similar licensing framework used in East Africa to help break barriers that improve competitiveness of the sector. This is in line with the nations SMART Zambia project that will see Zambia erect a tier 1 and 2 data centre at a cost of $400million. Government ministries will also adopt e-way of doing things.

The upcoming auction represents a rare opportunity for international wireless carriers to expand in sub-Saharan Africa without making an acquisition. Slowing economic growth and falling tax revenue have limited the need for new providers, while Ethiopia is the only significant market that hasn’t already opened up spectrum to private bidders. Some companies, including Airtel and Millicom International Cellular, have made a partial retreat by selling off country units.

Zambia had 12.4-million active mobile subscribers at the end of June, 10% more than a year before, according to data from the finance ministry. The country had 5.9-million internet users by the end of June, a 3% rise from the figure at the end of December. Almost all of these use mobile internet.

MTN Zambia had the country’s largest market share of 48.3% in 2016, while Airtel Zambia had 41.4%, according to the finance ministry’s economic report for that year. Zamtel had the smallest market share with 10.4% of mobile subscribers.

MTN is the continent’s largest wireless operator by sales and customer numbers.