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Why, really, is ZESA not selling prepaid electricity tokens on EcoCash and Telecash?

Cash PowerIn the past couple of months, we have seen the issue of the electronic vending of ZESA prepaid electricity tokens come to what seems like a close. After issuing and withdrawing tenders to have an external company distribute (or aggregate) prepaid electricity tokens in 2012, and then again last year in September, ZESA eventually decided they’d just do it within the group by appointing its internet subsidiary PowerTel for the job. Forget that PowerTel itself had apparently been part of the 40 or so companies that bid for the tender.

PowerTel itself selected NetOne, CBZ Bank and ZB Bank to retail the tokens via their networks using billing integration built for them by E-Solutions. E-Solutions by the way has been working with mobile operators and banks, building software integration solutions for a number of years now. NetOne wasn’t a surprise really. You’d expect them to receive such favours from their government sisters.

What was surprising though is that both Econet and Telecel, the mobile operators that have significantly more subscribers – together accounting for about 85 percent of mobile subscribers locally – are not part of ZESA’s (or PowerTel’s) prepaid tokens retailers. You’d expect the government to see these as an opportunity and not a threat or competition. EcoCash has been widely popular with about 3.5 million subscribers, and indications are that Telecash, which works essentially the same way as EcoCash, is getting very popular too. NetOne’s OneWallet on the other hand has generally been known to have had its adoption affected negatively by the need to swap SIM cards.

A source at Econet told us recently that they actually submitted a proposal to sell prepaid tokens via EcoCash and got rejected. According to our source, the company started engaging with ZESA some time last year and this year, in early April, got a rejection letter from ZESA CEO, Eng. Chifamba. Although we haven’t seen the letter, our source says Chifamba’s letter essentially confirmed that tokens aggregation was for government enterprises only. Strangely, despite the tender process being largely inconsequential, it seems Econet chose to not be part of the process, preferring instead to submit it’s proposal outside the tender.

Bill payments are big money. The private companies are definitely eyeing those 400,000 prepaid meters that have been installed so far. That’s a possible expenditure of an average $30 a meter each month – $12 million worth of transactions. Government, despite not having enough network capacity and reach, would like to keep the money within. Forget that they already charge tax on all mobile money transactions and would therefore get to collect even more money if they let the private mobile money providers in.

To understand the situation more, we sent some questions to Zesa Holdings spokesperson Fullard Gwasira but a week later, he still hasn’t responded. Our sources at PowerTel however confirmed that PowerTel is the only aggregator because they are the same company really. He also said that in addition to NetOne, CBZ and ZB Bank, we should expect more to start integrating to Powertel’s aggregator platform. These they said, may include TelOne, POSB, Agribank, Petrotrade and Zimpost. So yes, all government for now.

You’d expect government to want to use the natural commercial incentive that private companies have to implement products like these successfully and to have the platforms running without fail so that both the government and the private company get paid. You’d expect that of a broke government especially.

The aggregation platform being an internal ZESA system is not a problem in my opinion. Especially considering that PowerTel already spent a fortune on a modern billing system, and that the work needed to get the platform ready was being provided by a software company. The problem is in not taking advantage of the distribution networks that already exist through partners like Econet and Telecel.

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25 thoughts on “Why, really, is ZESA not selling prepaid electricity tokens on EcoCash and Telecash?

  1. hanzi tinenge taku promoter competition, probably these guys feel, if they open up to Ecocash and Telecash they are further disadvantaging Onewallet

  2. Here is a proposal of a simple solution that could enable ZESA “juice” cards to be sold by air time vendors:
    ZESA distributes preprinted cards of various denominations through the airtime vendors. A consumer buys the card and scratches it to reveal the recharge code then from his mobile dials a short code affixing the recharge_code and his meter_number (e.g. *130*recharge_code*meter_number#) The USSD session is handled by a ZESA back end system that separates the recharge_code from the meter_number. If the scratch card is valid the ZESA system then generates the actual recharge number which is specific to the given meter number and gives it back to the consumer (the same way you get a message on the screen after topping up your mobile or enquiring on the balance).
    On the ZESA backend, every scratch card number represents a unique record ID in the system with 3 important fields: amount, meter_number and recharge_number. Processing of each transaction involves reading this record. If the record doesn’t exist an error is given. If the record is “virgin”, i.e. meter_number and recharge_number fields are blank, they are populated with meter_number given in the USSD string and recharge_number generated by the system. If the meter_number and recharge_number are already populated AND the meter_number matches the one on the USSD string, the system simply gives back the same recharge_number else it generates an error. This will allow the consumer to retrieve the recharge_number any number of times in case he loses the recharge number before entering it on the meter.
    This simple system can be implemented using USSD, SMS, Web App, Mobile App, Interactive Voice Response, etc. The instructions on how to recharge can be printed on the back of the “juice” card in 2 or 3 short lines.
    It is even feasible for say ZESA, Econet, Telecel, Net1, Powertel and Africom to cooperate and implement a universal “juice” card worth 5 or 10 dollars that works for all of them. They can implement a centralised system that handles all the USSD recharge transactions. Once a scratch card number is used for say ZESA then it becomes invalid for use on any other system. The advantage of this approach is that vendors will stock on just one type of card rather than have their money tied up in several card types some of which may not move as well as others. Universal “juice” cards will ensure that even in the remotest parts of the country consumers have uniform access to “juice” cards for their preferred service provider. Imagine as an analogy if Toyota, Mazda, Ford, Mercedes, etc required different kinds of petrols for their vehicles. It would make life very difficult for both the motorists and the petrol station dealers because they wouldn’t know how much of each product to stock and there would be many instances where you drove your Mazda to a petrol station and only find there is Toyota petrol. Remote dealers especially wouldn’t be able to stock enough different kinds of products.

    1. Marek, that is actually a quite brilliant idea you put forth. Kudos to you!

    2. The problem with recharge cards is commercial not technical. ZETDC are offering in the region of 7% commission Powetel and E-solutions pocket 4% meaning an airtime vendor would get 3%. All vendors are saying they prefer airtime which offers 10%. So as a vendor if you are asked how to apply your 1$ you will put it in airtime where it earns you 10c rather than Prepaid Electricity which earns you 3c. The issue is economics not technology under the current model.

  3. Just trying to help out netone nd other sister parastatals …… because lets be honest if they didn’t close out ecocash or telecash those two combined would take over the whole show leaving crumbs for everyone else. ……they are that good

  4. Econet needs to know what rejection tastes like as well. Just as they don’t understand why they are not working together, we too do not understand why Econet refuses to work with us.

    1. i love econet and i will never pay my zesa thru netone powertel zb cbz , will go to zesa directly

      1. econet is efficient as compared to net one why ain’t they proposing that service to be left of the network drivers,econetwireless

  5. Econet and Government (NetOne) are not new to disputes, Econet have refused to share infrastructure such as base station towers, as required by POTRAZ the regulator.Give me one reason why Government (ZESA/Powertel) should agree to work with Econet

    1. As a matter of fact!!! NetOne is the MNO that refuses to share basestation towers with other operators. Telecel and Econet have more than 50 shared sites with in harare alone. Econet also has quite a number of lease arrangements made with NRZ towers and several municipalities..
      The reason why Gvt/Zesa/Powertel should agree to work with Econet… For the convinience and good of the general public, who by the way are the major stakeholders in Gvt and parastatals

  6. This is a classic case of corruption. Powertel has failed to deliver and their system is pathetic and always has hicups. I would rather buy from ZETDC offices than from ZB, CBZ or Powertel in order to line pockets for those that corruptly cancelled a tender and handpicked Powertel and E-Solutions (which had both been disqualified during the aggregator tender process) anyway. Their failure of capacity and technical competency to deliver is now coming out. At the end of the day, all houses not built on solid rocks shall fall!

    1. What failure when electricity tokens are being bought via CBZ, ZB, and NetOne? Zvimwe chimbobumaiwo kuti zviri kufamba. So many people are now buying at more places for their convenience. When new channels are added as the writer suggests, there will be even more convenience. That is progress bro! Kudos to Zesa and Powertel !!

  7. Where are we headed to??? These things are happening everyday, in front of our noses. #Corruption #lining their own pockets.

  8. i think this was a good opportunity to talk about youth empowerment by factoring in the unemployed to sell these vouchers thus helping others become their own bosses. the decision to block Econet and Telecel is very economic because if you just let these guys let loose-they will become monopolies however netone was suppose to be barred also to make it fare

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