A report in the NewsDay today says Telecel has reported Econet to the Zim telecommunications regulator, POTRAZ, allegedly for unfair business practices relating to not neutrally allowing calls from Telecel subscribers through to the Econet network. Before the report, some Telecel anonymous sources had indicated to the press (including us) that Econet is throttling calls from their network.
According to sources at Telecel that contacted us over the weekend, Econet is deliberately throttling calls in a bid to sabotage an ongoing Telecel promotions that allows Telecel subscribers to call any network in Zimbabwe at a 50% discounted tariff. The promotion, which is called Mega Bonus Reloaded, was launched in June.
We contacted Econet about the matter and they still haven’t responded since Monday. The allegation however is a quite serious and, if proven, indeed criminal. Section 91 (1) (b) of the Zimbabwe Postal and Telecommunications Act (Chapter 12:05) says:
Any employee of a telecommunication licensee or a cellular telecommunication licensee who willfully mistimes, intercepts or prevents the transmission of a communication shall be guilty of an offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment
If true, the move by Econet would be both foolish in terms of the law, and also foolish business wise. In Zimbabwe the interconnection fee for off-net calls is US 7 cents a minute, which means Econet collects 7 cents from Telecel for every minute that a Telecel subscribers calls the Econet network. Effectively, this means for Mega Bonus Reloaded calls, Econet makes more money than Telecel per call. It would therefore make no business sense to block these calls. As a shareholder I’d be very mad at Econet right now if this were true.
But some also say Econet is bleeding subscribers seriously and this is an effort to stem subscriber churn. The theory goes that throttling Telecel – Econet calls will result in increased Econet – Econet calls, which make Econet much more money (24 cents a minute) than the calls from Telecel. But even if this were the case, the trouble with the law is just not worth it!