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TMCNet: Zain Should Benefit Locals [editorial]

[July 26, 2010]

Zain Should Benefit Locals [editorial]

Jul 26, 2010 (East African Business Week/All Africa Global Media via COMTEX) -- Zain, the multinational mobile telephony provider, recently been acquired by the Indian telecommunications firm, Bharti Airtel, is a welcome guest in East Africa, but its business should benefit East Africans more than easing mobile communications.


Since it is a big business that makes huge profits annually, and repatriates them 'home', a substantial part of those profits should indeed be retained in host countries in order to trickle down to the local people, financially.

This argument gains credit following Zain's announcement last week that it will be investing US$150 million in Tanzania for the next three years, funds that will transform Zain Tanzania into the local market leader.

Bharti Airtel's Chief Executive Officer (International), Manoj Kohli, said in Dar es Salaam: "Tanzania is a great market with immense potentials for growth... We want to be a partner in Tanzania's growth and work with the government to take telecom networks deep into small towns and villages of the country," an excellent determination.

The CEO said it plans to double the local tele-density from the current 30% to over 60%, raise affordability of telecommunication services and boost employment in the telecommunications sector, among other targets Airtel envisages to achieve.

Zain plans to avail its services to over 25 million people in towns and remote areas of this vast territory, because mobile phone services remain the critical issues that require instant solutions in Tanzania. To date there are an estimated 12.5 million with mobile phones, but most hold multiple SIM cards.

Apart from physical facilities, Airtel also plans to introduce its ecosystem of global partners in Tanzania, resulting into additional employment opportunities for skilled and semi-skilled people.

It intends to recruit not only qualified engineers to install and run the state-of-the art network systems, but also semi-skilled rural youth in its distribution networks.

It has pledged to replicate its Indian Corporate Social Responsibility programme in the country by setting up of schools that offer free quality education to the underprivileged children in rural areas. Zain also has presence in 16 other African countries.

That's well and good, but Tanzania has since discovered that mobile phone providers are minting money and have to benefit the host countries more. Tanzania has passed a law that will oblige all phone operators to list a percentage of their shares on the Dar es Salaam Stock Exchange to enable the public to share the cake.

Most phone operators have been calling for the postponment of the commencement of the 'shares' legislation, but have been urged on to start contacts with the Capital Markets and Securities Authority to be informed on how to go about listing shares at the DSE. It would be ideal if this will apply in all EAC countries.

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