Wednesday, February 24, 2010

The Electronic and Postal Communications Bill: Welcome to 1967?

I know that we as human beings we like progress. We love to see things change around us. It is not like change is good all the time, but we like to see change nonetheless. Some changes are introduces out of necessity, but some changes are out of sheer creativity juices that flow through our veins as human species.

I think it is in same spirit that someone in Bongoland had an epiphany to introduce the Electronic and Postal Communication Bill of 2009. I have not read the bill, but I would trust that Leonard Mwakalebela of Daily News did a good job in summarizing some of the key stipulations of the bill, which include the following: sharing of infrastructure among mobile phone operators in Tanzania, mandatory listing of mobile operators’ stocks in Dar Stock Exchange and slapping a fine on unregistered sim card owners.

Please see the Daily News article here…

Honestly, the rationale given by the government for requiring mobile operators to share infrastructure are creative and acceptable, if the goal is cut down on the prices and protect the environment. Nonetheless, the two other stipulations of the bill are shaky if you ask me.

A practical solution for unregistered sim card, as pointed out by Hon. Arfi is for the mobile companies to turn off the darn line. Is that hard to do?

Now let’s see the mother of all booboos – requiring foreign mobile operators to cross-list at the DSE.

I am not going to argue against the notion that other countries also require cross-listing. That is because I will need to scour through laws and requirements of a plethora of countries. That ain’t easy. Nonetheless, the argument given, especially by a few legislators such Hon. Nyami that listing at the DSE will bring transparency to the mobile company’s financial statements is stupid.

The truth of the matter is this, if TRA wanted to know how much Zain generated in revenue, they could do that from a computer screen. From the comfort of my couch, I was able to tell that Zain generated $327.8 million in revenue in financial year 2008 from their operations in Tanzania. Unabisha? Just select any financial report for any year you want right here..

You know, some folks don’t like my choice of words, especially when I brazenly come out to say that some things are stupid. Forcing companies such as Vodacom, Zain, and so on to cross-list because Tanzanians want financial transparency is just plain stupid. If a dude like me could access Zain’s financial records openly and easily, how come TRA can’t?

Let me just remind our ignorant MPs of this fact – countries don’t invite foreign direct investment primarily to boost corporate tax revenues. Countries invite foreign direct investment to derive other indirect benefits that are larger than corporate taxes.

The other second reason given to require listing is to allow wazalendo also to participate in the economy. If wazalendo have that money in their pockets to invest, why didn’t they band together to form a new telecom company instead of waiting to “nationalize” other successful companies? Furthermore, why didn’t Tanzania formulate proactive policies that require joint ventures with wazalendo before any foreign investors commence operations?

We can argue and kill each other about the merits of the bill, but what the Tanzanian government did in spirit is to nationalize telecom companies. Period. That is essentially reversing to 1967.

As Hon. Arfi put it, the bill is also fundamentally discriminatory as it targets a single industry. The spirit of majority’s participation in their own economy shouldn’t be narrowly confined to a single industry. The message it sends to the world is this – Tanzanians are incapable of creating successful companies, they only wait to snatch successful companies from their owners.

Please read my lips ( typing fingers) this bill will haunt Tanzania for many years to come.

As it has been clearly claimed by telecom companies in Tanzania, it is not the government’s duty to play board members of any given company. The decision to list on any stock exchange is up to the board members of those companies. Just for the information of our ignorant MPs, the main reason companies go public is because they want an easy access to capital, though it spreads ownership in turn.

Ask yourself this – if a company wants to raise $10 billion at the DSE today, would they be able to that in a heartbeat? I doubt that. That’s why companies go to robust exchanges like London or New York. Not because they want to stash cash away from Dar-es-Salaam, but because they can raise the needed capital there.

I rest my case.
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