Zamtel, whose official name is Zambia Telecommunications Company Limited, is a government

owned telecommunication service provider in Zambia. It was established under the Companies Act
Chapter 388 of the Laws of Zambia. The Corporation falls under the jurisdiction of the Ministry of
Transport, Works, Supply and Communications pursuant to Gazette Notice No. 183 of 2012 and the
Statutory Functions Act No. 4 of the Laws of Zambia. The Zambian government sold off 75% of
Zamtel shares to the Libyan company LAP Green networks to keep Zamtel from shutting down after
plans to recapitalize it failed. The shares were sold for $394 million despite several attempts from
citizens to block the sale on claims that the company was still viable. However, this sale was reversed
by the recent government under the Patriotic Front (PF) following allegations that the company was
fraudulently sold. According to an Article entitled, „Zamtel in huge losses, firm is technically
insolvent-Auditor General, ‟ since LAP Green networks‟ exit in 2012 the corporation has been
making losses and is technically insolvent. (Auditor General’s report, 2014)

The corporation has grown to be a pioneer of the telecommunications industry in Zambia by

providing a cost effective, comprehensive and high-quality telecommunication facilities and services
to its customers. Zamtel's mission is to provide cost effective, relevant total communication solutions
and services that consistently offer unrivalled customer experience through the use of cutting-edge
technology and customer focused marketing whilst maximizing shareholder value. Zamtel's vision is
to be the leading communication services provider of choice. In Zamtel's article entitled, Zamtel
launches all networks offer, ‟ its objective is to make communication affordable for everyone.
Zamtel's scope is to offer the all-networks promotion to all Zamtel subscribers and non subscribers
who wish to join the network countrywide. This is purposed to enable its customers to call any
network, thereby suiting everyone’s pocket and non-subscribers wishing to join the Zamtel
community. (Habeenzu, 2010)

Business enterprises world over seek for ways not only to better manage operations but also thrive in
the industry. The field of academia has over the years come up with various theories on how one can
manage daily operations and being careful to ensure that the organization is also performing well.
One of the important tools in any business operations of the use of PESTEL. PESTEL is a business
strategy that views the business environment from different angles. The acronym PESTEL stands for
Political, Economic, Social, Technological, Environmental and Legal. “PESTEL analysis, which is
sometimes referred as PEST analysis, is a concept in marketing principles. This concept is used as a
tool by companies to track the environment they are operating in or are planning to launch a new
project/product/service etc.” (Cole, 2006) The PESTEL framework is a tool that is used by marketers
to analyze a marketing environment of a company and point out macro-environmental factors. It
guides managers and displays which factors are of more importance to a strategy and focus on them.
Managers create strategies which best suit the important environmental factors. They understand an
environment and take advantage by producing products that suit the information obtained from
consumers.(Pestel, 2016)

According to Fuller, (2010) specifically a PESTLE analysis is a useful tool for understanding risks
associated with market (the need for a product or service) growth or decline, and as such the
position, potential and direction for an individual business or organization. This helps an organization
improve its performance in the business industry. The PESTEL framework helps an organization to
see the big picture and encourage its employees to work hard by helping them understand the vision
of a company.

In 2016, mobile devices, data and the internet, are the biggest players in the telecommunication
industry. Customers, companies, and the government were divided on how the industry should

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 develop. This was case with Zamtel which at a point was not performing well as earlier highlighted.
Therefore, this paper outlines the PESTEL analysis of Zamtel highlighting the influencing factars
politically, economically, socially, technologically, environmentally and legally.

Political

A number of developments have taken place in the country and government has made some key
decisions. Regulation issues that have come up frequently. The government may have one idea on
how telecoms should be handled. The people might have another based on the freedoms they enjoy.
Customers believe internet and data should be treated the same by service providers and the
government. For example, WIFI and internet are a daily part of life. Customers wish the government
to acknowledge the internet as a basic human right. It’s required for education and many careers.
Even applying to a job is an online experience; going to a company website and uploading a resume
on their servers is essential. The political environment that is created by the government is key in
ensuring that the Company succeeds in its endeavors. The political environment is full of risks for the
telecommunications sector. The traditional political risks for telecommunications are the ones
related to regulations, network licensing, national radio spectrums and in case of certain nations
trade barriers. Generally, these issues have affected the network operators such as Zamtel and the
effect has been felt less by equipment and service providers. However, one factor that worked in the
favor for Zamtel is the fact that is one of the state-owned enterprise or parastatals in Zambia which
makes it relevant in the industry and is able to receive much attention from the government. For
some time, the telecommunications industry enjoyed relative freedom based upon its importance in
the process of globalization. However, a number of threats have emerged in last some years that
could mean that political risks are on the rise again.(Mambwe, 2015)

Economic

In the last decade, Zambia has experienced shocks both internally and externally driven by natural
and economic factors, such as economic crises, climatic shocks and fluctuating commodity prices.
These factors have affected the country’s economic growth and development path. The role of
economic factors is just as important in the context of the telecommunications industry. Zamtel has
not been spared by such challenges. People have in the recent past been cutting back on their
telecommunications spending during the difficult times. It is in principle to note that the happier the
the economy, the higher consumer spending will be on any product or service. These economic
trends are also supported by technological changes. (Muhammed, 2009) This is true in the case of
Zamtel despite those bottlenecks faced in Zambia. Interest rates, inflation, and taxes have affected
the operations of Zamtel and the telecommunication industry. The expenses in the recent past have
affected the pricing per plan offered to customers too. It has been costly and expensive to build
towers and resources in rural areas. Customers who don’t live in big cities are affected , this in some
cases has even made most rural customers to adjust prices of the Zamtel products particularly with
regards to purchase of airtime. However, Zamtel with the change in the policies imminent due to
change in government which has a focus on methodical economic revamption of the Zambian
economy implies the Zamtel will be able to profit from such a change. As more houses are built, the
need for telecommunication resources increases. This can drive prices (plus revenue) up depending
on location, number of customers in an area, and the need for telecommunication services by
Zamtel. Growth is dependent on the market (customers) and technological advancements.
Businesses are using the internet and mobile phones for marketing. They create social media pages,
advertisements on sites, and digital marketing campaigns to reach customers around the world. For
this reasoning, jobs are opening up and increasing for Zamtel in the telecommunication industry.

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 Social

The information and communications technology (ICT) sector has continued to record remarkable
progress as evidenced from the increase in the number of people accessing various ICT services as
well as the growing number of providers of diverse ICT services and products in the country.
Amongst the service provider Zamtel has the highest and leading service provider. In the recent past
the telecommunications company was known to be the network for retirees and old folks in society.
However, advances in the way the company have strategized the all-social aspects of society are
taken into consideration suiting everyone and all ages. Social factors also have a deep influence on
the industry and its profitability. Connectivity is central to so many things including work and
entertainment. Globally, the use of internet-based services has grown. A higher number of people
are using the social media for fun and business. (Zambia Internet Speed Data, 2020) From YouTube
videos to Netflix, video streaming services all require a very good connectivity. This is a reason that
the use of 4G has grown globally and the company has taken advantage of this. Moreover, more and
more people like to remain connected on the go. This is a part of their lifestyle. For some it is
because they are too busy with work and in case of others, they cannot remain disconnected with
family and friends. Thus, Zamtel aims to be an all-peoples network.(Mambwe, 2015)

Telecommunications horizontal growth is limited. Specifically, it’s difficult (and expensive) to expand
in rural regions. Customers are left with less than a handful of options when it comes to buying
internet, mobile, and television packages. Customers need these packages to communicate with
friends, partake in social media challenges, buy products online, find stable careers and more.
Telecommunication has become a vastly important aspect of the daily life of the average person.

Technological factors

The entire telecom industry is based on technology and therefore technological changes influence it
deeply. The use of mobile computing is on the rise. Around the world IT is changing things like never
before. It is central to several things including business and productivity. Computers and cloud
computing have become the core of productivity. It is the telecommunications companies such as
Zamtel that stands to gain the most from these technological trends. (Mambwe, 2015) Introduction
of smartphone and tablets for sale have kept growing and none of the two can be used fully without
a fast connection that Zamtel provides. Both needs and requirements for telecom services are
advancing. For example, telephone companies such as Zamtel has installed the optic fibre network in
their builds over copper now. This will ensure stable connectivity and prevent thefts because of the
wires used. Phones have become more compact, moving the telecom business into a primarily
wireless business. Basic needs in smartphones, like voicemail, caller ID, and messaging are covered.
Now people want internet access on the go. So, data is added to mobile plans. WIFI has been built
into buses and cars too. This ‘need’ leads to more investments in companies who hold a strong
influence over telecom developments in computers, smartphones, and laptops. (Jonas and Poulsen,
2019)

Environmental

Climate changes and global warming affect how telecommunication products reach customers. For
example, due to changing weather patterns, unstable rainfall patterns, winds as well as hailstorms in
some areas telecommunication towers maybe affected and cause loss in connectivity. Climate
variability and climate change have highlighted an increased need for strengthening climate
information generation. In terms of employment, with technology advancing, employees need to
adapt to changes. An example has been in the way work activities have been carried out during the

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 COVID-19 pandemic. The company has offered cheap services in terms of bundles and subscriptions
in comparison to other network service providers.

Smartphones are a large part of the e-waste generated every year. In the light of the level of e-waste
generated by both service and equipment providers, the industry is focusing on waste management
and minimizing its environmental footprint. The company Zamtel is a green network. Also, customers
demand and telecom companies are expected to deliver. But with needs in the telecom industry
changing often, it’s not guaranteed which technology will stay, be advanced, or discarded.

Legal factors

The telecommunication industry is often impacted by legislation issues. Particularly issues with the
government, monopolies, and customers. But the industry has allowed importing and exporting of
telecom products. The issuance of the Information and Amended Licensing Regulations in June 2017
providing for a converged licensing framework was expected to among other things facilitate
enhanced innovations among providers, improvements in the quality of service, increased
investment and deepen competition on the market. Following the issuance of the new licensing
regulations, Zamtel has continued to attract new investments and providing a conducive
environment for reinvestments by existing operators and provision of a leveled playing field.(ZICTA,
2017;ZICTA, 2019)

Opportunities and Threats Matrix of ZAMTEL

SWOT Analysis, which stands for Strengths, Weaknesses, Opportunities and Threats analysis, is a
system or process of considering the internal and external factors affecting the performance of an
organization in relation to competitor or market situation. A SWOT analysis of a telecommunication
company appraises the company's health by looking at its resource strengths and weaknesses
concerning the quality of how it sends and receives data and information globally over fiber-optic
cables, networks, antennas and other communications equipment. The analysis also identifies
external opportunities and threats that may help or hurt the company in the future.

Strengths Weaknesses

 Cutting-edge fibre-optics technology,  High operating costs

 A respected brand name,  Large unskilled Labour force
 Excellent customer service and  Huge debts in loans and unpaid
 A strong sales team benefits
 Presence in all the provinces and major  Little attention prioritized to Research
districts. and Development (R&D).
 Legacy of being the sole fixed land-line
service provider.
 Government funded
 High Growth rate and Domestic market
 Cost advantage: All networks offer

Opportunities Threats

 Increasing consumer interest and a  A sluggish economy, increasing

decrease in competition. Technological competition and increased government
Changes: Arrival of new Technologies regulations against the
(e.g. 4G, 4.5G LTE, Fibre) telecommunications industry

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  Opportunities are beneficial, outside
events that a company can use to boost
its existing strengths.
 Growing demand
 Unfulfilled customer need such as
Mobile Money, high-speed internet
even in rural areas
 New rivals/competitors that offer
customers fast service and cutting-edge
technology (e.g Vodafone Zambia)
 Court Cases and Bad public image:
Zamtel property held without title
deeds.

Diagnosis of SWOT Outcomes

Zamtel has been around for many decades and is a powerful brand that has received its discussion
and attention. Zamtel’s popularity has been sustained over time despite rapidly changing consumer
needs and ever-developing technology patterns. Zamtel has been on the list of the top leading firms
in the country. It is maintaining its prominent position in the Zambian telecom industry by critically
analysing and reviewing the best strategies through SWOT analysis. It has greatly improved from
wired communication to wireless communication and is aiming towards providing faster and better
connectivity. Companies such as Zamtel are heavily relying on their success through marketing and
are always looking for talented marketers. Strengths and weaknesses are issues internal to your
company, while opportunities and threats apply to the market in general. If Zamtel intends on selling
mobile phones in a market that already has a number of well-established retailers, the fact that
Zamtel does not offer anything new could be seen as a weakness. Zamtel understands the specific
demographic groups who will be most likely to purchase products in the country. Sometimes
multiple groups have a need or desire for a product, but selling to them requires different marketing
techniques. This is a strength for Zamtel.

Recommendations

Zamtel should ensure a justified steady growth by making more valuable projects that create more
customers than just profit. This can be through the introduction of more and more customer-
oriented services that will add value to the customers/subscribers as well as the company.

The management of the company should continue to put more efforts in keeping a well-motivated
work force that constitutes the impetus of the company’s creativity.

The management should expand the staff composition of the company to counter the problems of
communication barrier in customer care services in some areas and the possible accusations of
marginalization.

The company should start a mass awareness campaign and related programmes to counter the
earlier conceived beliefs that it is network for retirees and old folks;

The management should ensure proper utilization of the well celebrated optic-fibre connection and
fulfill the promises of better connectivity and low rates/charges as this will boost the company’s good
will and profitability.

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 References

Auditor General report (2014). Accounts of Parastatal Bodies and other Statutory Institutions.
[Online] Available at: http://www.ago.gov.zm/report/parastatals/ [Accessed 14 Dec. 2016]

Cole, G.A. (2006), Strategic Management-Theory and Practice (2m1 Edition), London: Thomson
Learning.

Fuller, M. (2010). Building Blocks of Strategy Management, Management Decision, Vol. 48, Iss. 1, pp.
5-6

Habeenzu, S. (2010) “Zambia ICT Sector Performance Review 2009/2010”, research ICTafrica.net,
Policy Paper 17, 2010

Jonas H, and Poulsen, J. (2019). “The Arrival of Fast Internet and Employment in Africa.” American
Economic Review 109 (3): 1032–79. https://www.nber.org/papers/w23582.

Mambwe, E. (2015). The state of Internet technology in Zambia(a media perspective). In Media
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Zambia Internet Speed Data. (2020). Retrieved April 07, 2022, from Trading Economics website:
https://tradingeconomics.com/zambia/internet-speed

Zambia Ministry of Transport and Communication (2018). Information Communication Technology.

Available at: http://zambiamtc.opendataforafrica.org/lguael/informationcommunication-technology
(accessed April 2022).

ZICTA. (2017). “Zambian Information and Communications Technology Authority - Licensing

Guidelines.” ZICTA, Lusaka. https://www.zicta.zm/Downloads/FINAL%20LICENSING%20GUIDELINES
%2015%20JUNE%202010%20with%20 AMENDMENTS.pdf.

ZICTA. (2019). ZICTA 2018 Annual Report. Retrieved from

https://www.zicta.zm/Downloads/publications/Annual/ZICTA ANNUAL REPORT 2018.pdf

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http://www.pestanalysis.com

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