'We feel unwanted,' says Econet

Published: 26 May 2014

Econet Wireless says it has been at the receiving end of unfair treatment from authorities and "feels unwanted" in certain spaces, claiming this was stifling its growth, group chief executive Mr Douglas Mboweni said.

Mr Mboweni made the sensational remarks before a Parliamentary Portfolio Committee on Information, Communication Technology, Postal and Courier Services yesterday.

The committee is chaired by Kuwadzana East Member of Parliament Nelson Chamisa.

Mr Mboweni said a lot of effort was spent on the "pull him down" syndrome aimed at Econet when, "ideally", the energy should have been expended on facilitating its growth. Mr Mboweni said the playing field was not level.

The Econet CEO implored policy makers to bring down "speed restrictions" for companies that needed to move fast in rolling out their programmes and grow the economy rather than being "punished" for investing.

Mr Mboweni said: "We need to guard against the pull him down syndrome" if the country was to succeed in doing "something revolutionary" in growing the economy, adding there was no justifiable reason why "our" gross domestic product should be less than $15 billion.

The Econet boss cited issues such as when Econet was made to pay $137 million towards renewal of its licence for its new 20-year tenure, extended from 15 years while others were given the option to pay over a period.

"We had to expend a lot of cash to renew our operator's licence when others were given terms, in some instances over a period stretching for 20 years," he said.

The Econet Wireless boss said while the firm had to pay the entire $137 million instantly to renew its licence by June last year, its oldest rival, NetOne's, licence will only lapse after 21 years of uninterrupted operation.

Mr Mboweni said NetOne's licence has never been deemed to have expired, despite the fact that it was issued at a Summer Summit the country hosted in 2006.

"Telecel were told they need to pay the $137 million, and we must say at this stage that they are partially paid up," he said.

He said against this background, it was unfair to demand that they share facilities.

Mr Mboweni said Econet has faced challenges rolling out its plans in many areas, including near and around security areas which have been declared "no go areas" yet people complained of poor coverage.

He added that the company has also encountered long delays in getting permission from authorities to build infrastructure required for its network service roll out.

Further, Mr Mboweni said Econet has faced difficulties exploiting business opportunities in utility companies such as Zesa Holdings where access has allegedly been reserved for State related firms like NetOne.

Mr Mboweni claimed Econet has failed to structure a deal with Zesa Holdings for mobile payment the same way it structured a deal with Multichoice for DSTV payments.

He said the country's biggest telecommunications company felt like it was being restricted from moving forward after investing $1,42 billion, which gave it market dominance now allegedly perceived as a "monopoly". Others however, believe Econet bullies smaller players.

Mr Mboweni said while its peers in the sector rested on their laurels during hyperinflation, Econet left no stone unturned looking for capital to grow the business, which it feels sometimes "gets punished for".

Funding options it pursued included a $20 million loan secured in 2006 from Afreximbank, sale of its stake in Botswana's Mascom for $14 million in 2004 and the multi-creditor facility of $307 million obtained in 2012.

The huge investment, Econet said, has helped increase the country's mobile telephone penetration rate from 0,3 percent in 1998 to about 103 percent at the moment while internet penetration has reached 40 percent from almost zero percent at its inception in 1998.

"We feel kind of unwanted in certain areas. We have had a lot of things written to us and said to us that you sometimes feel like you are not Zimbabwean," he said.

Mr Mboweni also pointed out that the company also had to expend energy correcting rumours that Econet was run by foreigners, including claims he was not Zimbabwean, stemming from his South African like surname.

He said mobile subscribers have grown from about 500 000 at inception in 1998, to over 8 million now.

"It feels like some people are comfortable with mediocre numbers."

Econet said it has also been rebuked for refusing banks unrestricted access to its USSD messaging platform.

It claimed some banks have tried to misrepresent facts by using disagreements over commercial terms to portray the picture that it wanted to shut them out of EcoCash, which has handled over $4 billion to date.

The company wants banks to either use its mobile money transfer system, EcoCash, or get direct access to the unstructured supplementary service data gateway, but on its own tariffs and terms. The feud over USSD sparked a standoff with a number of banks.

"We believe sharing infrastructure should not be parasitic, but it should be synergistic," Mr Mboweni said.

But Econet shares most of its infrastructure, about 300 sites, with non-competitors Transmedia, Zesa and National Railways of Zimbabwe.

It says efforts are underway to share more sites on a one-to-one basis.

Mr Mboweni said Econet had refused demands by other operators, Telecel Zimbabwe in particular, to share agents saying they should first build their own network of agents before suggesting a sharing of resources.

The Econet boss also said the company has faced other challenges including having to spend heavily in putting access roads to set up base stations, dealing with the issue of frequent and long power cuts and import duty on some equipment needed for network roll out.
- The Herald

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