Zambia proceeds with Zamtel breakup plan

The Zambian government's plan to break up the financially troubled Zambia Telecommunication Co. (Zamtel) in a bid to save it from collapsing is moving forward, as company officials move ahead on a financial management plan.

Zamtel acting CEO Mukela Muyunda said last week that the Zambian government wants to separate CellZ from Zamtel. CellZ, a mobile service company, is Zamtel’s sister company, operating under Zamtel management for more than 10 years. The Zambian government wants the two companies separated so that they can be operated under different management.

"The government is working at ways of unbundling the company so that it is operated efficiently and effectively," Muyunda said.

Early this month, Zamtel workers went on strike for almost a week after learning that management was planning to lay off 800 workers in a bid to save the company. In addition, the company froze wages this year.

The company management and the National Union of Communications Workers (NUCW), a union that represents telecommunication workers in Zambia, have agreed on a monthly program to reduce the deficit through March of next year. The company management has since halted the planned retrenchment of workers but has instead cut down foreign travel of directors as part of the program.

Up to now, Zamtel management has not explained why the company has not been profitable despite providing fixed, mobile-phone and Internet services, and collecting revenue from other service providers for facilities including the Mwembeshi satellite station.

A senior government official, however, told IDG News Service that the Zambian government -- through its various ministries -- owes Zamtel billions of Kwacha (millions of U.S. dollars) in unpaid telephone and Internet bills.