Over the past several days, the discussion in the mobile money space locally has been around a threatening SMS that Econet was accused of sending to their EcoCash agents, essentially telling them that becoming Telecash agents would be a bad move. The SMS, which was also sent to us by a number of people read:
Please note that the business will be closing all agent lines that have been polluted by our competitor starting Monday. The two can not mix. @Econet Wireless
So did Econet send the SMS? Our first reaction after receiving the news was that the SMS couldn’t possibly be official. It’s language is too casual. We spoke to Econet executives to check and the confirmed no such message had been authorised or sent by the network. In fact they were surprised and indicated they were investigating.
We tried to locate but failed to find any agents that received such a message ourselves. All we were getting were forwards. One EcoCash agent though, who’s not accepting Telecash yet, told us he’d preferred to stay away from Telecash because his friend at Econet had told him there could be problems down the road if he did.
On where the message came from, eventually a source sent us an Econet employee’s phone number, and told us that was the source of the message. We called the number and the guy basically said he couldn’t speak to the press referring all questions to HQ. Econet HQ basically said they’d also been made aware of the same number but that there’s no merit whatsoever in the SMS issue they would not issue any official response.
But the issues seems to be getting worse: a source at Telecel told us today that a number of possible agents had told them they were receiving verbal threats from Econet. Verbal, because, according to the source, Econet was now avoiding any communication that could be used as evidence.
Assuming the the threats were true, would Econet have any understandable reason to make such a move. Yes, actually. Remember one of the reasons the mobile money re-entry by Telecel is expected to be easier is that Econet has already invested heavily in an agent network and soft infrastructure (education, training material, sessions, learning from costly mistakes etc…). Mobile money agentship cannot be compared to selling airtime recharge cards or selling beers at a bottle store.
Telecel doesn’t have to spend money on these things because they’ve been done for them by Econet. In fact, if you look at Telecel’s tariff schedule, they basically copied the structure of the Econet one and just made the tariffs lower. Kinda same way Econet copied the M-pesa one back when they launched.
Whether however, this ‘we-invested-in-soft-infrastructure’ is reason enough for Econet, we can’t say.
There’s also the issue of the agent’s liquidity. Econet has said that through its bank, Steward Bank, it will support its agents with cash if they run out. Could there be fears that if an agent does Telecash transactions the cash float could be mixed up and therefore compromise the cashflow injection support Econet provides?
All this is just conjecture ofcourse. What’s clear though is that Econet’s agent contract doesn’t require mobile money service exclusivity.