POTRAZ’s ‘exorbitant’ fees challenged

POTRAZ’s ‘exorbitant’ fees challenged
Minister of Information and Communication Technology (ICT), Postal and Courier Services, Supa Mandiwanzira

Minister of Information and Communication Technology (ICT), Postal and Courier Services, Supa Mandiwanzira

THE Supreme Court has ordered the High Court to hear a case in which internet service provider, Telecontract (Private) Limited, is challenging the legality of the licence fees that the Postal and Telecommunications and Regulatory Authority (POTRAZ) introduced in 2013.
The company, which previously operated under a TelOne franchise before going on its own, is seeking to upgrade from B-class service provider to an A-class service provider.
It is arguing that the operator fees stipulated by the regulator are exorbitant, arbitrary and unjustifiable and should therefore be declared null and void.
The case also cites the Minister of Information Communication Technology, Postal and Courier Services, Supa Mandiwanzira and the Minister of Transport Communication and Infrastructure Development, Joram Gumbo.
In May, High Court judge, Justice Esther Muremba, threw out Telecontract’s court application on a technicality that the application did not comply with High Court rules and also that the firm had no legal basis to challenge the regulator’s affairs and conduct.
“I am not inclined to grant the relief that the applicant is seeking because it has not shown that it has a legal right and sufficient interest in the matter to warrant it to ask for this relief,” Muremba ruled then.
“The fact that the applicant believes that the first respondent is not performing its affairs in a fair manner does not give it the locus standi to seek to compel it to publish all licences in the Gazette in terms of S.I 262 of 2001. The question that can be asked in this matter is, what is the applicant’s interest in the relief that it is seeking? It appears to me that the applicant is trying to use the courts to investigate the first respondent, which is not proper. The words ‘any person’ used in s 4(1) refer to a person with a legal right and sufficient interest in the relief that he is seeking. I will therefore not grant the relief,” further reads the judgement.
This resulted in Telecontract appealing to the Supreme Court, which ordered that the High Court should hear the company’s application because by it being a player in the telecoms sector for the past 20 years, the firm has valid interest in POTRAZ’s affairs and conduct.
“We find that there is merit in the contention by the appellant (Telecontract) that it is a service provider in the Internet Access Provider industry while the first respondent is the regulator of service providers in the same industry. Further, that since the concern of the appellant is that there was unfairness and irregularity in the exercise by the regulator of its authority in this respect, it had a legal right and sufficient interest in the matter, entitling it to approach the court a quo as it did,” noted a Supreme Court ruling written by Justice Susan Mavangira, with the concurrence of Justices Elizabeth Gwaunza and Tendai Uchena.
The Supreme Court ordered that the case be referred back to the High Court where it should be decided on the merits of legal arguments by the parties.
In its application, Telecontract is arguing that POTRAZ is not only being unreasonable in setting up steep licence fees, but is also being grossly unfair in refusing to accept payment plans for the $5,5 million A-class licence that is valid for 14 years.
The company accuses the ministers of coming up with the fees that POTRAZ is charging without consulting stakeholders. It argues the figures are arbitrary, yet the standard practice is that these fees should fall within the broad guidelines of the International Telecommunication Union (ITU).
“The applicant averred that the first respondent has taken the position that all licence fees must be paid up front despite the amount being outrageously high and arbitrary. It averred that the refusal by the first respondent to accept payment plans has resulted in it being unable to pay the licence fees of US$5,5 million which amount is arbitrary, grossly unreasonable, unfair and prohibitive with no justification in this current economy,” read the court papers.

  • Cde

    Truely, POTRAZ fees are unrealistic and out of this world. We may blame operators like Econet for being too greedy by charging exorbitant prices for their services, but the whole problem starts with the incompetence of POTRAZ, that are clueless of their mandate which is supposed be to promote Telecommunications in Zimbabwe but are actually doing the opposite.

  • The Engineer

    This judge, Muremba needs to be relieved of his duties. It was very clear that even before going to the Supreme court, Telecontract had an interest in the telecoms sector and he should have made a determination from there and not simply dismiss the case. $5.5 m is a lot of money given the skewed licensing regime in Zimbabwe. The licencing by Potraz does not allow cross-licensing operations to be under one company eg Econet and Liquid. It was very easy for Liquid to get 20 or even 30 year bonds to setup liquid by virtue of latching on on Econets voice licence which had reasonable income. POTRAZ is not a forward thinking organisation. Back in the day it was argued that licencing should be separated and clearly distinguish between say infrastructure companies (wholesalers) and service providers (retailers). They didn’t listen. Today you have tweaking of rules sorely because of the lackadaisical approach that other countries like Tanzania/Nigeria/Kenya successfully implemented. Today 3 towers exist in one locality. Fiber cables from several providers lie buried in multiple ducts going in the same direction. Its a huge waste and the sooner the licencing regime is changed the better. POTRAZ is punishing the smaller operators. Other countries like Zambia embrace the smaller operators (SMEs) as they enhance the service offering. POTRAZ can loan ZIFA 1 million dollars and yet cant provide a payment plan to one of their own. Sad.

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