Chapter 2.4 : ICT Sector

The  ICT  sector  is  represented  by  a  four-tier  system,  namely  policymaking,  legal and  regulatory framework, operators and consumers (end users).

Policy Making

The Policy making machinery in the country is an important component shaping the ICT industry. Given the crosscutting nature of ICT, all line ministries, legislators, traditional leaders, co-operating partners, public sector, private sector, civil society and individuals are key stakeholders to the policy making process. However, with respect to the ICT Portfolio, the Ministry of Communications and Transport  is  charged  with  the responsibility  of  setting  the  policy  direction  for  the  industry and country at large taking into account stakeholder views. Therefore, a clear policy framework is the foundation for the development of ICTs in the country.

Legal and Regulatory Framework

The  responsibility  for  development  of  the  legal  framework  for  the  sector  lies  in the  ministry  in charge of the ICT portfolio supported by the ministry responsible for the Justice portfolio and the legislature  (Parliament).  However,  another  important component  in  the  process  is  the  regulatory function  in  the  sector.  Currently, the Communications Authority of Zambia and the Ministry  of Information and Broadcasting Services carry the regulatory functions in Telecommunications and Broadcasting  sub-sectors  respectively.  With the enactment of the IBA Act, on
Independent Broadcasting Authority will assume the responsibility of regulating the broadcasting sub-sector.

Operators

At the operator level, the major players can be classified as follows;

• Telecommunications ServicesThe telecommunications   sub-sector   is   composed   of   traditional   fixed telephony   and   mobile communications based on the Global System for Mobile (GSM) communication standard.  Another category in this area includes Internet Service Providers. Equipment installation and other services is a small component of the sub-sector.
• Information TechnologyThis  category  comprises  businesses  involved  in  office  automation  and networking  solutions  such  as supply   and  installation  of computers and networks, system vending, end user training and distributorship. Over the years, the number of projects in this category has increased. However, foreign companies  carry  much  of  the  substantial  works leaving local companies to provide  very limited services to clients.
• Postal ServicesZAMPOST is the major player in this category. However, a number of private sector competitors have entered the market especially in the courier business. Due to the introduction of technologies such as Internet on the market, the letter-based system has registered a downward trend over time. However, given the potential of E-Commerce in the country due to increased Internet use; there is great potential for the postal system to contribute significantly to E-Commerce penetration in the country. Therefore, re- engineering of the sub-sector is required to fit the new business environment.
• Broadcasting ServicesRadio and TV form the key components of the sub-sector. The traditional approach to broadcasting has changed significantly over the years. Satellite and Internet technologies have created new opportunities and challenges for policy makers, broadcasters and regulators. This requires a lot of ingenuity given the not-so-clear separation  of  Radio/TV and Telecommunications services in the current scenario where technology and market convergence  are driving diverse industries  to  merge.  Currently,  electronic content  can  be  carried  irrespective of  the  technology  whether  it  is  radio/TV  or  telecommunications transmission networks. Therefore, this situation is changing the legal and regulatory framework required to administer the sub-sector.
• ConsumersThe consumers of products and services form an important component of the sector. These include end users, dealers in consumer electronics, consumer associations and corporate customers. A number of factors have been identified as inhibiting the growth of the local ICT industry. Among the key factors affecting the growth of a vibrant private sector-driven ICT sector are:

1.  
   1. Many industry players consider the current investment regime (incentives and taxes) to be unattractive  for  recapitalisation  and  new  investments  in telecommunications,  broadcasting and Information Technology subs-sectors;
   2. Lack  of  access  to  affordable  capital  among  Zambian  entrepreneurs  in  the ICT  industry; especially start-up capital for SMEs in the sector;
   3. High import tariffs and taxes imposed on ICT products and services are regarded as having a negative impact on the expansion of the ICT sector, this is despite the reduction of duty on computers from 15 to 5% in the 2004 budget;
   4. Inadequate supporting infrastructure development such as roads, telecommunications, and electric power to increase the demand for ICT services;
   5. Poor coordination of the ICT sector resulting in the inability to attract adequate domestic and foreign direct investment;
   6. Lack of a coordinated industry voice on business matters affecting the sector; and
   7. Limited regulatory powers amidst convergence of services.  Information Technology is not regulated despite forming a key component of the ICT sector.