Zim telcos fume over USF fund increase

Zim telcos fume over USF fund increase

Zimbabwe has hiked contributions by telecommunications companies into the Universal Services Fund (USF) – used to develop infrastructure in remote and underdeveloped areas – giving a blow to operators who had already complained about transparency over usage of the fund.

The country's three mobile companies – Econet Wireless, Telecel Zimbabwe and NetOne – must now pay more into the USF.

The increase in contribution to the fund, from 0.5% to 1.5% of annual turnover, has been gazetted by ICT Minister Super Mandiwanzira.

Econet Wireless, the biggest telco in the country, has lodged a court appeal demanding information over usage of the fund from the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz), which administers the fund.

Econet says it has paid up to US$59 million during the period March 2009 to November 2015 into the fund, but does not know how the money is being utilised.

"We are denied a significant increase in call tariffs but the government then hikes this levy. It means that our bottom lines are increasingly being stretched and profitability, which is already bad, will decline further," said a telecom executive in Zimbabwe.

Mandiwanzira was not immediately reachable for comment on Thursday morning. He has however been quoted by the state run Herald newspaper saying: "We want to improve access to ICTs to marginalised communities."

Telecommunications is one of the strongest sectors in Zimbabwe but competition from emerging and cheaper communication platforms such as WhatsApp, Facebook and Skype has been driving down revenues for telcos.

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