Zimbabwe: POTRAZ has over US$20 million in unused Universal Service funds

Mergers, Acquisitions and Financial Results

More than US$20 million under the Universal Services Fund is lying idle at the Postal and Telecommunications Regulatory Authority of Zimbabwe after the authority failed to come up with a concrete plan to utilise the funds.Government has since come up with an immediate plan to utilise the funds collected from the country's three mobile companies, Econet Wireless Zimbabwe, Telecel and Net-One.According to the audited statement of comprehensive income for the financial year 2009, Potraz had a surplus of US$9 970 234, while the Universal Services Fund had income of US$6 994 816.Indications are that an amount of US$4 506 177.91 was collected in the first five months of the year bringing the total available for the Universal Services Fund to US$21 021 228.

Potraz only incurred expenditure of US$45 335.80 for the period January 2009 to May 2010 against the Universal Services Fund of US$11 500 994,43. In consultation with the minister responsible for Potraz, the Finance Minister said due to challenges in the telecommunication and postal sector the US$21 million be utilised in line with the objects of the Universal Services Fund.

Accordingly, US$10 million would be directed towards supporting the country's fibre optic backbone critical for the maintenance of high standards of quality in the telecommunication sector.

This will be complemented by an allocation of another US$3 million through the Infrastructure Development Bank of Zimbabwe to follow their shareholding rights in Africom. In a bid to extend cellular telecommunication services in rural areas, Minister Biti allocated US$5 million under this programme while US$2 million was allocated towards improving access to ICT in such under-serviced areas and communities as schools in both rural and urban areas. Zimbabwe has a penetration rate of 30 percent, the third lowest in the region. Low penetration rates expose Zimbabwe in terms of the connectivity.

A remainder of US$1 million has been directed towards the support of E-Governance. Potraz is mainly funded from fees, charges and other income accruing from licences issued.

Minister Biti proposed the formulation of the Potraz Annual Implementation Plan aimed at ensuring the provision of sufficient domestic and international telecommunication and postal services in the country. "It will be necessary that our legislation recognises the role of the State in determining the investment priorities in postal and telecommunication services through Potraz's Annual Implementation Plan

"I am, therefore, making proposals for the amendment of Section 74 of the Act to make Government, through the Ministry responsible for Potraz and Treasury, have oversight on the formulation of the Annual Implementation Plan," said Minister Biti.

National fibre optic requirements amount to a total of US$39 million worth of cable to cover Harare - Bulawayo, Gwanda and Beitbridge, as well as Harare to Kariba.

Treasury has already allocated US$6.2 million for Harare - Mutare in the 2010 Budget. The next phase worth US$10 million is targeted at laying new fibre optic cable between Harare and Bulawayo, and an upgrade of cable between Harare and Kariba. Minister Biti said the cable between Harare and Bulawayo will, therefore, be able to benefit from the under-sea cable coming from Maputo to Harare.