NetOne cancels Zellco contract. What next for Zellco?

Starting last week, NetOne has been making statements in the press notifying Zellco NetOne subscribers that the relationship with Zellco, its service provider, has been severed. As a NetOne service provider, Zellco signed up new post-paid customers and collected revenue on behalf of NetOne for a fee.

Here’s the full text of the NetOne statement:

NetOne advises all former Zellco Cellular (Pvt) Ltd customers that with effect from 12^th of May, NetOne cancelled the Service Provider Agreement between Zellco and NetOne. You are now required to start dealing with NetOne directly for all your bill enquiries and payments. NetOne will now be sending you bills to you directly.

Payment for all bills will be made through:

NetOne’s One World Shops and Zimpost offices across the country. We assure you, that there will be no service interruption as a result of this cancellation. NetOne encourages all Zellco customers to update their personal information by simply filling in new forms at their nearest NetOne OneWorld shop nationwide, to ensure that their details are captured.

This comes as no surprise to anyone; Zellco and NetOne have been having a payment dispute for some time now and this is not the first time NetOne has announced a cancellation of the contract. Zellco was able to successfuly challenge the first cancellation some 4 weeks ago through the courts. This cancellation speaks some finality though.

At the height of the country’s hyperinflation in 2008, when it made no business sense to offer post paid services, NetOne maintained post-paid subscriber accounts. Competing operator, Econet, did away with post paid subscriber accounts moving all subscribers to the prepaid package.

NetOne started off with 3 service providers, Cosmos Cellular, Zellco and FirsTel Cellular. The Cosmos Cellular contract was terminated following a payment dispute. This latest contract cancellation means NetOne is left with one service provider, FirsTel Cellular.

We reached out to Zellco chairperson Biggie Chitima to get comment on what this means for Zellco and this is what he said:

We have communicated what is necessary to our customers and we will tryto give them the best possible service now and in future. Zellco was exclusively in existence for NetOne business from inception till now. If and after this agreement is properly shut down, Zellco may have access to the rest of the market.

Existing Zellco customers have got and continue to have service with or without a clear Zellco-NetOne relationship. We have made sure of that to the best of our abilities

It’s not clear just what type of services Zellco will provide going forward. You will remember that Zellco launched Gigatel, a VoIP business, last year. Maybe Zellco will focus on that. Gigatel has been mostly silent in the market since launch, probably because of interconnection issues bedeviling all the licensed Internet Access Provider chasing VoIP.