Zambia’s opposition: We will renationalise Zamtel

Mergers, Acquisitions and Financial Results

Zambia will witness national elections in 2011. Main opposition party-leader Michael Sata, who leads the country’s Patriotic Party, says he will reverse the privatisation of Zamtel, because he does not see that strategy as being in Zambia’s best interests.

Zamtel has been headline news in recent days as three organisations, Libya's LAP Green Networks, India's BSNL and Angola's Unitel have all been bidding for anything between 51% and 75% of Zamtel. This has not deterred Michael Sata from raising the objections that new owners are likely to close down rural branches of Zamtel in order to concentrate on more lucrative urban areas.

Mr Sata’s words were quite clear; as he said to Reuters, “Those bidding for Zamtel are doing so at owner's risk. The PF in government will reverse the decision to privatise Zamtel. Even if it is sold we will renationalise it." For him, Zambia’s parliament would decide the conditions for renationalisation.

This year Zamtel’s revenue has been approximately US$100 million. For Michael Sata this was because it was owed money by the Zambian Government, "If the government paid all the Zamtel bills, Zamtel would be very viable. The government owes Zamtel trillions of kwacha and that is what has created problems."

Other opinion has been expressed by opposition politicians and trade unions, who say Zambians should hold a bigger stake in the company, and also by independent analyst Oliver Saasa who informed Reuters that renationalising Zamtel would deter other investors and was not in Zambia’s best interest as the sale was legally binding.

And we at Developing Telecoms could not help noticing another comment by Michael Sata, namely that Zamtel is Zambia's only licensed fixed-line provider of voice and data communications and that it had performed poorly despite its monopoly rights. Despite? Or because of?

Developing Telecoms