Source: Econet rejects infrastructure sharing | The Financial Gazette August 4, 2016
ZIMBABWE’s largest mobile telecoms network, Econet Wireless, says it will not share its massive mobile money infrastructure with competitors until it generates a significant return on investments made in a period spanning about two decades.
Econet says it has invested at least US$50 million on the mobile money distribution network, but it has been facing heightened pressure across the board to share the infrastructure with several competitors who have entered the market.
Stakeholders have been querying why many companies operating services to a similar destination have been using different infrastructure when they could pool resources and invest in a single network to cut costs.
Speaking at the Mobile Money and Digital Payments conference last Thursday, EcoCash head, Natalie Jabangwe, said the company would only consider sharing its infrastructure after recovering costs.
This comes as government said it was in the process of establishing a framework for infrastructure sharing, which will compel both public and private companies in telecommunications to share.
The framework would be a constructive input between the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) and telecommunications sector players.
These include TelOne, NetOne, Econet and Telecel.
“Let me make a very clear point to all the attendees of this conference and very humbly so to the Honorable Minister (Supa Mandiwanzira). It takes a lot to be able to grow a mobile money payments business. When you talk about over six million customers registered, up to 70 percent of Zimbabwe’s adult population. Forty seven percent of Zimbabwe’s gross domestic product moved on EcoCash,” Jabangwe said.
“It is a result of millions and millions of investment in the distribution network. Of course there will come a time when it will be inevitable for that distribution network to be shared, but I think we must appreciate that a lot has gone into building that distribution network. Over US$50 million has gone into building the distribution network,” she said.
In response, ICT Minister, Supa Mandiwanzira, said government was blocking entry of bigger, better resourced international mobile networks to protect existing local companies, including Econet.
Mandiwanzira said government had blocked Kenya’s Safaricom and South Africa’s MTN “who have been knocking” on Zimbabwe’s doors.
“If government did not want Ecocash to be the largest we could have opened our gates for Safaricom to operate M-pesa in this market. We could have allowed MTN to set up in this market and offer the services that Econet offers,” said Mandiwanzira at the conference.
“I can assure you that they come with the huge pocket to dwarf any player in this market. They have been knocking on our doors but we have kept them closed because we want to protect them (local mobile operators).”
The Econet Wireless’ mobile money transfer service, Ecocash, controls 98 percent of the local market with six million customers.
Last year, it moved US$6,6 billion in transactions.
“It is wrong to assume that you have the first move advantage and therefore you must close out other Zimbabweans from benefiting from a system on which government is spending resources defending you, making sure competition does not come to grab your market,” said Mandiwanzira.
Zimbabwe has two other mobile networks, NetOne and Telecel, both of which are controlled by government.