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Zambia’s state telephone utility will spend about $105 million to lay a fibre optic network and to lift its mobile subscription to one million customers by June 2008, its managing director said.

Simon Tembo said Cell-Z, a subsidiary of the state-owned Zamtel Ltd., hoped to increase its mobile subscriber base from the current 300 000, and had signed contracts with ZTE China to expand the GSM network, and to improve rural telecommunications.

Another Chinese firm Huwaei had been awarded a contract to install a fibre optic network throughout the southern African nation’s nine provinces.

“This is being done in this financial year (ending in March 2008), we have already signed contracts for the national optic fibre, for the GSM, the rural and metropolitan fibre optic backbone,” he told Reuters in an interview.

Tembo said the national optic fibre network would cost $48 million while $25 million would be spent on expansion of the Cell-Z network, the country’s third-largest mobile telephone provider.

“Rural infrastructure has been obsolete for sometime now and we are going to do rural telecommunications development on which we are spending $23 million,” he added.

Tembo said Zamtel had also spent $3,5 million on a fibre optic network for the capital Lusaka.

“For the national optic fibre, installation starts in January … we intend to do everything and finish before 2009. Most of the expansion for the GSM will be finished by June 2008.”

Zamtel had borrowed funds from local and foreign lenders.

“Operators will benefit from high speed backbone network in that it will facilitate cost-effective interconnection between business houses,” he said.

Zambia’s leading mobile telephone firm is Celtel, owned by Kuwaiti-based Zain Group, followed by MTN-Zambia, a unit of South Africa’s MTN. Zamtel employs 2 880 workers.

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