State Monopoly is Bad for Namibia – The Namibian

MANY OF US mere mortals do not know the technical details of dark fibre that has ignited a fight between state-owned titans NamPower and MTC (Telecom to a lesser extent too).

What every consumer understands, however, is that government-run monopolies are major contributors to the high cost of living and other constraints that Namibians endure.

NamPower owns the majority of dark fibre in Namibia.

Wikipedia says: “A dark fibre or unlit fibre is an unused optical fibre, available for use in fibre-optic communication.”

In essence, dark fibre is modern technology’s gold equivalent – used for private networking, internet access, and internet infrastructure networking.

It is akin to airports, highways and railway lines.

MTC, Telecom Namibia and former cellphone company owners PowerCom have been the main users of NamPower’s dark fibre, the backbone of digital infrastructure that is increasingly crucial in our lives.

These state-owned companies entered into exclusive lease agreements for the use of the infrastructure, which the Namibian Competition Commission is investigating as anti-competitive behaviour.

In 2016, Cran ruled against them, but such is the nature of parastatals that they can get away with ignoring regulations.

That exclusive agreement is like allowing only some people and organisations to use Namibia’s roads and railway lines, which were built with taxpayer funds.

NamPower and MTC clashed only because the electricity provider decided to charge the telecommunications companies more than the cheap rates they got used to paying.

It is difficult to not agree with MTC managing director (MD) Licky Erastus labelling NamPower “opportunistic” for wanting to make the maximum amount of money out of the lease, and that ultimately the cost would be passed onto cellphone and internet customers.

Customers always pay for any increase in price so businesses run at a profit, albeit excessive in some cases.

Yet NamPower’s MD, Simson Haulofu, is absolutely correct to call out MTC as the opportunist.

After all, MTC has been riding on the infrastructure and assets of others (Telecom and NamPower) while growing its monopoly, registering profits and declaring dividends to shareholders – especially the government.

Yet the cost of cellphone and internet usage in Namibia is among the highest compared to many open/competitive markets.

MTC and Telecom have made it difficult for Namibians to take maximum advantage of technologies like voice-over internet protocol (VoIP), number transfer and costs between different networks as they protect their market share.

Government leaders have created Frankenstein monsters by feeding and nurturing negative monopolistic tendencies among state-owned companies.

Parastatals are often arrogant because they can caucus politicians and use laws to benefit them at the expense of the broader economy.

Government leaders have often fallen for calls to protect parastatals, in the process stifling competition which is essential to improved services, lower prices and broader access for the general population.

Many state-owned companies have clearly forgotten that the reason they were set up was to make life easier for the common customer.

Instead, they have become employment agencies for overpaid glorified bureaucrats, who significantly contribute to the high cost of living that has priced the majority of Namibians out of affording essential needs.

Government leaders should return to basics.

They should be setting up enterprises to grow the economy rather than being players and referees.

Backbone infrastructure, especially in the all-important telecommunications sector as well as radio and television broadcasting, cannot continue to remain in the control of parastatals which compete with private enterprises.

They should be handed over to neutral operators.

It defeats the purpose of having a government as an enabler to spur individual productivity and national economic growth.

The current set-up is as dumb and shortsighted as when apartheid made it easy for whites to dominate economic activity by cutting out blacks.

Such a mentality does not appreciate the concept of growing the cake so that more people or companies expand the broader economy and self-reliance of most individuals.

Limiting economic activities for part of your population (as it is alleged that some commercial farmers are discouraging export of Namibian beef to Ghana) can only shrink the economy of the entire country.