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Why Econet is going to call the government’s bluff

Tomorrow is Good Friday, so a lot of us are expecting one obvious thing to happen tomorrow, the start of the Easter Holidays and a long weekend that everyone looking forward to a Monday-off will appreciate. But there’s more to Good Friday, well for local telecoms at least.

Last Sunday, in a response to a statement released by Econet, the Minister of ICT, Supa Mandiwanzira gave the mobile operator an ultimatum to remove its installations on State-owned operator TelOne’s infrastructure and to have Liquid, its sister company, remove its fibre optic cable on ZETDC pylons by Friday this week.

According to Mandiwanzira, Econet complying with this and removing its infrastructure will show the operator’s seriousness in rejecting the government’s infrastructure sharing proposal.

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The way I see it, this is another (he already fired empty shots at Telecel) bad bluff from the honourable Minister. There isn’t going to be any dismantling of infrastructure by the end of the day tomorrow and it won’t happen anytime soon either. It’s something that Econet was aware of when it made the statement that set this debate off in the first place.

Despite any sweeping authority that the Ministry has or tries to display (there is all the evidence to show that only The Office of The President has the final say on local telecoms), companies like Econet that have a significant hold on macroeconomic outcomes always hold a better hand and are hard to give kindergarten timeouts. As monopolistic and displeasing as that may be, It’s the power of cold, efficient capitalism in a feeble economy.

So why call the bluff?

Besides the glaring fact that Econet said clearly in its statement and on other occasions before this showdown that it does, in fact, support infrastructure sharing; there is the lineup of logical barriers that anyone, even the Ministry of ICT, would have to scale just to let this happen.

Any adjustments to infrastructure, particularly Econet owned infrastructure, would result in a huge disruption of local telecommunications and an unnecessary setback to growth prospects for the industry.

Any act of removing Econet/ Liquid infrastructure that is being saddled by State operators also deprives the same State operators of much-needed revenue that they have been receiving from Econet for using these facilities.

Another thing to consider is the disruption of the economic activities of the country’s largest taxpayer and in the same swoop, the most visible financial services provider, EcoCash. These side effects would most definitely be frowned upon by the tax authority ZIMRA and the Ministry of Finance that’s trying to balance an uneven set of macroeconomic scales.

Even if we were to ignore all of that, let’s not forget that this infrastructure sharing issue has been around for longer than we’ve had Postal and Courier Services as an office title. Three ministers and many years ago its concerns were still being thrashed out by everyone who needs to have a say. Besides NetOne’s apparent turn and switch years ago from being anti-sharing, to being pro-sharing (I wonder why), the positions of everyone concerned has been fairly consistent.

They (the operators) all want to share, they just want to make sure that the structures and legislation put into place and the approach taken makes sense for every investor in the long term. It’s a basic approach to business that has a long-term view, something that the Minister, who is an entrepreneur in his own right, ought to appreciate.

What will happen then?

No doubt, Econet will comply. I doubt there is any other mobile operator on the planet that understands the implication of fighting the government more than Econet.

It’s just that now Econet has sent out a statement to Government, or any “decision maker” that kinda says,

We will do what you want, but it has to be fair. It’s no longer the mid-nineties. We don’t want to be taken for a ride. We know our worth to the State and to the citizens of Zimbabwe.

We can all expect some renegotiation of terms of sharing, something that might have actually started already. For now it’s going to be business as usual and we should, in the meantime, watch out for an Infrastructure Sharing Summit/Forum or round table. Active ministries tend to love holding those.


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