State telcos owe Econet USD85m


Image: Douglas Mboweni. By BiztechAfrica
Douglas Mboweni

By Alfonce Mizwo, Harare, Zimbabwe

Zimbabwe’s largest mobile network, Econet, says it is owed USD85 million by State-owned entities, TelOne and NetOne, in interconnect fees, up from USD70 million from February this year.

Chief Executive Douglas Mboweni told the Parliamentary Committee on Media, Information and ICT development that the company has been trying to get the fees owed to them for a long time and would continue to hold discussions to have the money paid out. He however noted that this was affecting the group as it the interconnect fees were taxed on uncollected revenue.

Teledensity was at 78% and expected to reach 100% in 2014, he said. Mboweni said that an increase of 10 mobile phones per 100 people boosts GDP growth by 1.25% in developing countries.

Internet usage in Zimbabwe was at 30% against Africa’s average of 17% and slight below the rest of the world on 32%.

Mboweni defended the tariffs, saying Zimbabwe’s were cheap when compared to other countries in the region particularly South African.

“The tariffs are a product of costs that the company incurs from supporting the network.”

He reiterated that power outages continued to be major drag on operations but the group had 72% of the network under backup power in the form of generators, at a cost of USD15 million a year.

Mboweni said there was need for policy alignment especially on network development adding that the operators should be the drivers of this policy. He said this with regards the Universal Service Fund (USF), which is used to finance provision of services in under serviced areas, to which the network operators have to contribute a levy of 2% of their total revenue per year.

Mboweni said there was no accountability of the USF and all the money that the operators had paid prior to dollarization had gone into the pockets and was eventually swallowed up by hyperinflation.

“Even post dollarization there has been no meaningful investment, save for the 10 sites that are currently under construction,” adding that USF was no longer as relevant as it was in the past.

Mboweni also said that getting approvals for a site was long taking upwards of 12 months for a site to be approved thus affecting network grade of service and customer experience.

On network sharing, Mboweni the group currently had 300 shared sites with Telecel, Telone, NRZ and Local authorities. Only NetOne did not want to share. He noted that before the expansion, Econet had approached NetOne for infrastructure sharing but they had refused.

“And now because Econet has grown big after the expansion, the same network is crying foul that we do not want to share.”

Mboweni said that it costs between USD80 000 to USD250 000 to construct a base station.

Mboweni said that most of the dropped calls and non-delivered messages were mainly caused by power outages and that the calls have to pass through various stages in the network.

When asked about the littering of the environment by recharge cards, Mboweni said the group was moving towards the elimination of paper cards through the use of e-wallets, available on the Ecocash platform.

“We are encouraging our vendors to migrate to the electronic recharge cards,” he said.

Mboweni said the country was now covered under the network save for the national parks with a subscriber base of 6.4 million. 

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