Econet under probe

Published: 04 April 2014

ECONET Wireless Zimbabwe has again attracted the ire of banks after it emerged this week that the mobile telephone company could be engaged in potentially unfair business practices that have attracted the attention of regulators.

Banks this week charged that Econet Wireless, which has hogged the limelight lately over similar alleged malpractices, has been engaged in coercive behaviour by its clients, forcing the Competition and Tariff Commission to intervene.

Detailed communications between the aggrieved bankers representative body and Econet, seen by The Herald Business this week show that some banks are not happy with a recent directive by the mobile operator to its suppliers that they would only receive payment through an account with Steward Bank, a subsidiary of Econet or through mobile money service, EcoCash for service rendered.

CTC executive director Mr Alexander Kububa confirmed yesterday saying the alleged unfair business practices by Econet were a subject of investigation by the regulatory authority.

"We heard about the complaint and as Competition and Tariff Commission, we are looking into the matter to see what competition concerns are there. I can confirm that we have heard about that complaint and we are looking into the matter to see what remedies we can make," Mr Kububa said.

Banks were particularly livid over the directive by Econet as they stand to lose clients and business they have cultivated over time and in some instances supported with funding.

The country's biggest mobile network operator has recently never been far from controversy especially involving competitors that include banks and other MNO operators.

Among the outstanding feuds, Econet has been involved in of late include the spate with Telecel over tariffs and banks over access to its unstructured supplementary data platform.

Econet effected a massive 60 percent unconditional markdown of tariffs on all packages at all times of the day in retaliation to Telecel's promotion that had also reduced tariffs.

Eventually, it had to take the intervention of Postal and Telecommunications Regulatory Authority to end the dispute, which had seen Econet disconnecting Telecel from its network.

The mobile phone operator also had a nasty clash with banks after denying them access to its USSD platform arguing access could only be through its EcoCash money transfer platform. The Reserve Bank has since intervened in the feud.

Econet has now pulled out another controversial stunt, directing all suppliers to open accounts with Steward Bank for payments above the limit permissible under EcoCash with amounts within the EcoCash limit payable over the phone.

Through correspondence authored by group chief finance officer Roy Chimanikire, Econet said that payments would be withheld for those without bank accounts at Steward Bank.

Econet Wireless spokesman Mr Ranga Mberi said the move would improve payments as the mobile telecommunications systems were now integrated with the bank adding that tracing and referencing payments would improve.

However, suppliers bemoaned the directive saying it violated their right to bank and receive payments with institutions of their choice. This has courted the ire of banks who automatically also lose business opportunities to Steward Bank.
- The Herald

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