CRAN running out of reserves

25 February 2020 | Economics

The Communications Regulatory Authority of Namibia (CRAN) could soon join the bulging queue of bankrupt state-owned enterprises as the entity is forced to dig into its reserves to compensate for the shortfall in revenue to sustain its operations.

Telecom Namibia and MTC owe CRAN more than N$220.4 million in regulatory levies in total, excluding interests and penalties, the minister of information communication and technology, Stanley Simataa, said in parliament.

“This is a massive gap,” Simataa said on Thursday.

Outstanding levies constitute 65% of CRAN’s revenue, he said.

CRAN imposed a regulatory levy of 1.5% on the annual turnover of providers of communications services in terms of the levy regulations in 2012 and heavily relies on regulatory levies.

CRAN’s reserves are about to be exhausted, Simataa said.

Along with the ministry of information communication and technology, the entity would like to avoid possible bankruptcy at all cost, he added.

Impact

CRAN had to take a decision to forgo the acquisition of regulatory infrastructure which included the construction of spectrum monitoring towers, acquisition of necessary monitoring equipment and tools to monitor and enforce compliance with spectrum licensing regulations.

CRAN also had to forgo monitoring equipment to ensure quality services and recruitments and retention of key personnel with requisite skills in ICT policy, regulation and management.

Over the last five years CRAN was forced to cut its operational budget, an act which although necessary under the circumstances, gravely impaired the attainment of some key strategic objectives, said Simataa.

Court ruling

“Furthermore, due to the court ruling, CRAN to date has been unable to set up the universal service which inhibited their ability to operationalise the universal service and access fund.

This fund would have provided the capacity to CRAN by extension government to accelerate connectivity to unserviced and underserviced areas,” Simataa said.

He added that the delay in setting up universal services, therefore, means that perpetuation of the existing digital divide between rural and urban areas and continuation of the attendant rural to urban migration. - Nampa

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