Home » Business » ’Econet Won’t Back Down On Tariff’

Econet Wireless Zimbabwe has declared that it will never back down on its earlier demands for banks to pay a prescribed tariff in order to gain access to its transaction messaging system.

Chief executive Mr Douglas Mboweni said the quoted tariff was benchmarked against regional rates for access to a similar system, but a number of banks do not agree to the quotation.

Econet has been engaged in a protracted dispute with banks over its messaging platform the unstructured supplementary service data (USSD).

The USSD is a protocol used by the Global System for Mobile Communications operators for communication with a service provider’s computers, allowing for real-time and two-way interactions.

Mr Mboweni however tried to play down the dispute with banks as a “storm in a tea cup”, but insisted Econet will not back down on its demands.

“When you set up infrastructure, you cannot have someone saying I want your service, but I want (for instance) to pay one cent,” he said.

Mr Mboweni said banks have to make a choice between two options either the USSD or the mobile money transfer system, EcoCash.

However, he indicated in no uncertain terms will banks be granted access to the USSD platform unless they pay its prescribed tariff.

However, banks have qualms about Econet’s tariffs for unrestricted access to the USSD platform in that the cost is on the high end. They argue the rate would make mobile banking expensive.

The country’s biggest mobile net work operator prescribed a tariff of about 30 cents, which banks feel is way above its rate for SMS.

Banks argued such a steep rate would make the cost of banking expensive, discounting benefits and convenience of mobile banking.

Econet said last week it has so far integrated a total of 10 banks to its EcoCash system with seven of the institutions said to be active.

Reserve Bank of Zimbabwe acting governor Dr Charity Dhliwayo in January said that there were 21 operating banking institutions (including the Post Office Savings Bank) following cancellation of Trust Bank’s operating licence on 6 December 2013.

Sources said banks were against the idea of using the EcoCash platform since that was akin to giving the telecoms operator monopoly.

Financial institutions feel low cost unrestricted access to the USSD system would allow all parties to compete on service and quality.

EcoCash forms part of Econet’s many overlay services riding on its extensive infrastructure to boost revenue streams as its traditional voice call business appears to have reached the top end.

Ostensibly, Econet is trying to protect its mobile money transfer business, EcoCash, in order that it continues to derive optimal benefits.

The mobile money transfer service, for which Econet levies a certain percentage of each transaction, processed $4 billion since 2011.

Banks feel that the tariff the Zimbabwe Stock Exchange-listed company has prescribed is multiple times its own rate for short messaging.

Source : The Herald

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