Harare — A TOTAL of US$5 million will soon be disbursed by the Postal and Telecommunications Regulatory Authority of Zimbabwe to local telecommunication companies for expansion projects, under the Universal Services Fund.

A Potraz spokesperson confirmed the funding saying the organisation was working on a distribution plan and details should be made available in due course.

Under the fund operators contribute two percent of their gross revenue and the money is supposed to be channelled towards expansion in underdeveloped areas and is managed by Potraz.

USF funds, which are mainly targeted at under-serviced, unviable, remote and rural areas of the country, are required at law to be disbursed in accordance with an implementation plan drawn up by Potraz in consultation with licensed operators.

The country's biggest mobile operator by subscriber base, Econet Wireless has already applied for the funds, which have already been approved by the Ministry of Information Communication Technologies.

Econet chief executive officer, Mr Douglas Mboweni said, "We have already submitted our plans, the plans have already been approved by the ministry and we will be utilising these funds."

He said the investment would be directed towards expansion projects that will benefit players in the mobile industry. The country has got three mobile operators comprising Econet Wireless, Telecel and Net-One.

Econet is likely to direct the funds towards the laying of a fibre network around all the major cities, which is being undertaken by Huawei Technologies, a Chinese company.

In Harare alone, almost 200km of fibre is expected to have been installed by March 2010.

This will dramatically improve data and Internet services, including 3G.

Mr Mboweni said his company was working on two new switching centres -- each carrying one million subscribers - recently commissioned by ZTE, the Chinese supplier.

Construction of new base stations is being undertaken by construction companies from China, South Africa, India, and Zimbabwe.

Other operators in the sector, Telecel and Net-One are also working on expansion programmes to increase their subscriber bases.

In his 2010 National Budget Finance Minister Tendai Biti also allocated US$5 million through the Vote of Credit aimed at establishing a fibre optic link between Harare and Mutare and Harare to Beitbridge.

Telecommunication development is expected to improve the country's penetration rate as well as the quality of service compared to other countries in the Sadc region.

Zimbabwe has a penetration rate of 30 percent, the third lowest in the region.

Low penetration rates expose Zimbabwe in terms of connectivity ahead of the 2010 World Cup to be hosted by South Africa.

Tourists and investors are keen on countries with high connectivity rates in transport and communication.