ZAMBIA - Telecoms & IT
Managing Director, Realtime
With an academic background in Economics and Business Administration, Samson Longwe was appointed Managing Director of Realtime Zambia in August 2010. In 2009, he was seconded to Realtime Zambia from Copperbelt Energy Corporation Plc (CEC) where he worked as Business Development Manager. Prior to joining CEC, Longwe worked for National Airports Corporation, where he served up to the position of Planning and Business Development Manager. Longwe also currently serves as Chairman of the Internet Service Providers Association of Zambia. He is an active member of the Zambia Chamber of Commerce and Industry and is also a non-executive board member on the PACRA Board
That growth has occurred over a period of about four years, and represents a marked increase in turnover. The company was a typical SME business, and a strategic decision was made to partner with Copperbelt Energy Cooperation (CEC), whereupon a joint venture was formed between the original owners of Realtime and Copperbelt Energy Cooperation. Immediately after the formation of the joint venture, in 2009, equity was pumped into the company by CEC to adopt fiber-optic technology for the provision of services. As a result, we pioneered the provision of fiber-to-the-premises (FTTP) in this country. Until then, customer connections were made via wireless links. When we pioneered the provision of fiber cabling, it immediately gave us a competitive advantage over other service providers. As a result, we were able to attract high-end institutional customers, such as the mining houses, the banking sector, and large manufacturing companies. Having established the joint venture, it was necessary to restructure the company and hire new staff to ensure an adequate skills base. The other change came in light of the fact that prior to the joint venture, Realtime had mostly been providing services to the mass market; however, subsequently, our attention turned toward the niche market of large institutional customers.
We have reasonable demand for our services, stemming from the fact that penetration levels remain low and also because Zambia’s economy continues to grow at an average of 6%-7% per annum. Furthermore, the government has introduced incentives to grow the ICT sector, which is acknowledged as being a sector responsible for creating efficiencies for business and the economy in general.
It has been an ongoing process, and we continue to engage with government. Thus far, we have seen the government provide incentives through tax measures. For example, we enjoy concessional rates on the importation of ICT equipment into the country. Initially, the government was only allowing the importation of computers at a concession; however, over the years we have seen the government increase the range of ICT equipment entering the country at concessionary rates. Also, in terms of regulation, the government reviewed our license fees downward in order for the ICT sector to penetrate more markets. Of course, there is more we hope to see done, but over time we have enjoyed the tax incentives offered to the sector.
Our regulator has tried as much as possible to ensure that regulations are provided in an environment conducive to the sector, whilst meeting the requirements of the international community. We have seen progressive changes in terms of regulation in the sector. So far, national regulation is in tandem with international practice. If there are going to be further changes, they will not be extensive. One area where we keep pushing for changes is the further reduction of license fees. In particular, our thinking has been that we are paying quite a bit more compared to others in the region in terms of operating fees, which currently stand at 3% for service providers such as ourselves. That amounts to 3% of our turnover. We trust that this could be reduced to as low as 1%, which is as low as other countries around the world.
In Zambia, we have about 22 registered internet service providing companies. However, of the 22 that are registered, maybe only about 10 are active. There is intense rivalry in the sector, and at the same time because of the intensity of the competition, it acts as a barrier to entry for new companies. Secondly, the sector requires an adequate capital because of the frequency of technological change. That, too, is a barrier to entry for new players and start-ups.
© The Business Year – December 2014
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