The Legal and Regulatory Situation

The Communications Authority of Zambia (CAZ, see www.caz.zm) was formed in 1994 and is nominally independent of government. It is tasked with regulating the telecommunications sector (voice, data, and broadcast media services) and issues operator and radio frequency licences. Types of licence include voice provider; ISP; carrier of carriers; and VSAT usage.

The ICT Bill of 2009 will move towards the provision of unitary licences (for voice and data services) and enhance the role of a restructured Communications Authority to include control of postal services.

In 2007 the Government launched the National ICT Policy, to be implemented through the Ministry of Communications and Transport. This includes the drive towards a knowledge economy by 2030 (as envisioned in the country’s ‘Vision 2030’); the encouragement of public access; the development of all appropriate telecommunications infrastructures; and the introduction of e-government and e-commerce, with appropriate legislation.

The Government is also committed to developing public-private partnerships in the telecommunications sector as well as more generally, although few exist as yet.

As regards radio frequency allocation, there is no control of the 2.4GHz STM band, which is in widespread usage, but all other frequencies are subject to licensing. WiMAX licences in the 2.5GHz range were allocated from 2004 and are now fully utilised, with licences in the 3.5GHz spectrum in the process of being issued.

Under the covering legislation CAZ has been charging a levy, since 1994, of 5% of recurrent turnover to all companies licensed in the telecomms sector. This is partly set to fund the operations of the Authority, and partly for the establishment of a universal access fund (UAF) for the promotion of rural communication in particular. With appropriate additions to the legislation in 2009 monies from the UAF are now to be released, with spending levels set at US$11.8m for the next 5 years. See separate details on the UAF below.

Government has yet to share the recognition of some of its neighbours of the benefits of liberalising the tax regime in order to encourage the growth of the ICT sector, and the general usage of ICTs. Thus, whilst import duty on computers is set at 5% (there is very little local production or assembly), that on other communications equipment is at 15% or above. VAT is charged on all telecomms services, including ISP services, and is not reclaimable as an input to business, and thus is really a sales tax, currently at 16%. There are no tax breaks for investors in the sector, and additional customs levies apply to the mobile sector. The cellular companies indicate that over 40% of user spend goes to the government in some form, and the ISP sector will be similar.

There are currently no exceptions to the tax / levy regime for rural communications, but this is under consideration.

Ministry of Communications and Transport

The Ministry of Communications and Transport is a government institution charged with the critical responsibility of formulating and administering policies in the communications, transport and meteorological sectors in order to enhance  sustainable socio-economic development for the people of Zambia.

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The Communications Authority of Zambia

The Communications Authority is a statutory body established by Act of Parliament, Telecommunications Act No. 23 of 1994. The Act confers upon the Communications Authority the mandate to supervise and regulate the provisions of the telecommunications services and products, to promote competition and to ensure that the benefits of this sector accrue to the Citizens of Zambia and its economy.

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