Home » Business » We Often Feel Unwanted, Econet Boss

ECONET boss Douglas Mboweni robustly defended the telecoms behemoth Monday, accusing some authorities of deliberately stifling the company.

Mboweni said the company often felt like it was being punished for investing billions in the country’s struggling economy.

The Econet boss told Parliament’s Portfolio Committee on Information Communication Technology that authorities appeared to use a “pull him down” approach towards Econet when “ideally, the energy should have been expended on facilitating its growth”.

With some eight million subscribers, representing about 65% of the local market, Econet dwarfs rival Telecel Zimbabwe – in which locals connected to the ruling Zanu PF party hold a significant shareholding- and the State-owned NetOne.

Econet, which owns Steward Bank, has also rubbed noses out of joint in the financial services sector with the huge success of its EcoCash mobile money product, leading to allegations of bullying and monopoly practices.

Company founder Strive Masiyiwa – who moved to South Africa to grow Econet into a global business – fought a landmark legal battle with the government over five years to get a licence with the authorities using the stand-off to give NetOne and Telecel a head-start.

Despite this initial hurdle, Econet has over the years grown into a diversified telecoms group with operations and investments across Africa, Europe, South America and the East Asia Pacific Rim while its Zimbabwe competitors struggled to establish a foothold on the local market.

However, Masiyiwa, publisher of the highly critical Daily News before it was shut down in 2003, has always been held with suspicion by President Robert Mugabe and his Zanu PF party.

In the lead up to the violent and disputed 2008 vote, the telecoms magnate was alleged to have been one of MDC-T leader Morgan Tsvangirai’s top aisers. Exiled MDC-T treasurer Roy Bennett complained bitterly about Masiyiwa’s influence on the opposition leader, according to WikiLeaks revelations in 2011.

Whether Masiyiwa’s uneasy relationship with Zanu PF and his alleged dalliance with the opposition is responsible for Econet’s troubles remains unclear, but Mboweni told legislators the company often felt “unwanted”.

He said Econet was often treated differently compared to its rivals, citing the recent renewal of its operating licence as an example.

While Econet was told to stump up the entire US$137 million fee for a new 15-year licence, rivals were given the option to pay over a period of time, Mboweni claimed.

“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 adding that NetOne’s ten-year licence had never been deemed to have expired, despite the fact that it was issued at a 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,” he added.

It was therefore unfair to try and force Econet to share its infrastructure with rivals, Mboweni argued.

Policy makers should try to bring down “speed restrictions” for companies that needed to move fast in rolling out their programmes and help grow the economy, he said, rather than “punish” them for investing.

The company was also encountering delays in getting permission to build infrastructure for its network roll out and faced difficulties exploiting business opportunities in utilities such as Zesa where access was allegedly reserved for State-related firms like NetOne.

Mboweni said the market dominance Econet was accused of abusing had been secured by investing some $1.42 billion into the local economy, even during the difficult years of hyperinflation.

While rivals sat back and moaned about a difficult operating environment over the last decade, Econet went looking for capital to grow its business, something it now “gets punished for”.

Deals secured included a $20 million facility from Afreximbank in 2006, the sale of part of Econet’s stake in Botswana’s Mascom for $14 million in 2004 and the $307 million facility obtained in 2012.

The facilities helped Econet increase the country’s mobile telephone penetration rate from 0,3 percent in 1998 to the current 103 percent while internet penetration has reached 40 percent from almost zero percent 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 adding there had been claims the company was run by foreigners allegedly because his surname was also common in South Africa.

Mboweni also accused rivals in the banking sector of misrepresenting disagreements over commercial terms to suggest that Econet was trying to shut them out of Ecocash.

“We believe sharing infrastructure should not be parasitic, but it should be synergistic,” he said.

Source : New Zimbabwe

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