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Econet still uninterested in interoperability (updated)

The Digital and Mobile Payments Ceremony and Awards held today turned out to be a melting pot of ideas and insights on issues around the state of payments in Zimbabwe.

With every notable player in this industry present, there was lot that was shared, on and off record. However, one remark that stood was from EcoCash, the mobile money service from Econet.

Under the topic of “Opportunities for interoperability among players to achieve financial inclusion”, each of the Mobile Network Operators had representatives that were given the opportunity to respond to the accusation that they are not doing enough to enable interoperability themselves before the regulator calls for it.

NetOne’s OneWallet indicated that it has enabled its system to send cash vouchers across to any mobile number regardless of the network. Telecash, like OneWallet also indicated that its system is already sending cash vouchers across networks and they have gone a step further to interface with all participating banks on Zimswitch.

Nettcash, even though its list of services and customer base is still way below the network operators, is network agnostic, representing operability.

Econet, however, could not explain why they have not taken the enabling steps in allowing interoperability. Econet responded that they,

are of course interested in interoperability but would rather not discuss the nitty-gritties at the Forum.

Attendees took this as a confirmation of the general conception that Econet, because of its huge subscriber base, operates as somewhat of a monopoly without a consideration for synergies with other players.

This attitude seemed to suggest that EcoCash hasn’t changed its stance which resulted in hostile relations with banks. At some point, this situation saw Steward Bank, the financial institution owned by Econet, being blocked from third party transaction acquiring business.

Zimswitch Econet reportedly attempted to curtail agents operations by trying to enforce network exclusivity before the national regulator interjected and instructed otherwise. This same stance from Econet is a huge clog in the infrastructure sharing implementation.

In line with its business model, Econet is actually enabled to interoperate with willing banks. EcoCash has connected to some of the major banks including CBZ, Stanbic, Steward, ZB, BancaABC and NMB bank. The major contention with the banks is that Econet has enabled the EcoCash platform to PULL money out of the banking sector and made difficult the reverse process of transferring money from the wallet to the bank.

On its part, the Econet argument is supposedly the same as with Infrastructure Sharing. Econet has spent huge capital outlays in establishing a market. As a business its not quick to want to share with competitors via opening up their agents, infrastructure or services.

In one of the paragraphs inside this story, we erroneously attributed actions taken to enforce network exclusivity to Zimswitch, instead of Econet. This was a reference to the mobile money agent wars from 2014 and had nothing to do with Zimswitch. The error has since been rectified. We apologise for any inconvenience caused by this mix-up.

Quick NetOne, Econet, And Telecel Airtime Recharge

8 thoughts on “Econet still uninterested in interoperability (updated)

  1. Understandably so on the reluctance for Ecocash interoperability – businesses are by their very nature profit oriented and at the end of the day it’s ALWAYS about the money. There’s no such thing as an easy business (unless you’re a loss making parastatal!) and Econet has worked tooth and nail over many years to become market leader in Zim. They have the lion’s share of mobile subs and they know interoperability will dilute this edge they have in the market. Any business in the same position would do exactly what Econet is doing to oppose/delay interoperability on Ecocash while they consolidate and lock in customers. We don’t do business for love hey we do it for money it’s not a charity yeah? Having said that it’s clear Ecocash interoperability will happen in the not to distant future. This is the battle facing all market leaders coz the market trailers always respond with a “me too but cheaper” product launch sooner or later which attempts to dilute the competitive edge of the market leader. Econet’s biggest hurdle still remains disruptive tech such as OTT apps which is clearly wiping out their profits the way dirt is wiped out on those detergent adverts. As the price point for Internet and app enabled devices gets ever lower and we start getting downloadable apps for Ecocash Telecash Nettcash etc the USSD walled garden approach of not providing Ecocash interoperability will come crashing down as anyone with the app can transact on the mobile money platform without a need for Econet sim card or mobile network signal as any wifi signal will be sufficient. The other major disruption will be the “simless” handsets being pushed by Apple and Samsung which use embedded vurtual sim tech allowing handsets to connect to any mobile network on the move and putting a final nail in the coffin of the humble simcard and thus obliterating the massive loyalty control MNOs have had over subscribers for the last 2 decades via simcards and device contracts. Interesting times ahead indeed

    1. I don’t know why apps are not the highest priority at Telecash, its an obvious strategy.

      If i were in charge at Telecel:
      * make a J2ME Telecash app, more than 80% of phones can run J2ME apps: only the goatiest of goats don’t. Android and iOS have 2nd priority.
      * load the apps on phones for free at every Telecel counter
      * make cash-out for amounts < $10 free, recipient doesn't even need to be signed up. SMS: "Dear econet subscriber John sent you $10, collect from any Telecash operator"

      1. Agreed, Tapiwa. TechZim interviewed the Telecel CEO a couple of weeks back. My comment on that interview ties in with your observation. Many companies may have CEOs but few have visionary CEOs. Having said this, I think EW are shooting themselves in the foot by their implicit “we’ll not share” attitude as well as their demand for their SPs to reduce services by 15%. EW forced many companies to open accounts with Steward Bank for them to transact with them. I hope they are not fooled by their success so far. Bigger corporates have fallen over the years due to this type of arrogance.

  2. Your second from last paragraph: can you please expand on the point you made that Econet “made difficult the reverse process of transferring money from the wallet to the bank”. My Ecocash menu shows a ‘wallet to bank’ option. Do you mean the option doesnt really work, or your comment has a much broader application than that specific function.
    Thanks for the info though: more please on the ceremony.

  3. Conflating infrastructure-sharing with interoperability is wrong, in my opinion. While Econet might have the same attitude on both topics, the conditions and justifications are very different.

    By refusing to work with other networks, Ecocash is limiting only itself, and not blocking Telecel/Netone from Econet’s customers in any way. All Telecel (or the banks) had to do (if they were competant) would be to embrace the internet and release IP-based apps for their wallet to everyone: including Econet subscribers. Econet can’t block internet services to their own subscribers.

  4. EW appears not to have factored in a variable that is completely independent of infra-structure – quality of service. Sometimes the “best overall service” comes from John Doe for simply providing, personal, friendly service. Nothing beats THAT!

  5. Econet is too big a network to really have to worry about considerations for the other players in the industry. Considering that it handles a bulk of the communications in Zimbabwe, it knows its got enough a market to be by itself. So there is really not much pressure for it to integrate with others. S it can easly ignore all others.
    Unfortunately the situation is not helped by the fact that there is a very high chance its going to be the only big private player in the mobile telecoms industry while telecel seems set to become a parastatal, through Zarnet. So its going to guard its bases carefully.
    My suggestion for the other operators is they should find ways around econet and try to come up with new innovative service additions to utilise their own current users. One thing they we must admit is most people have lines for other networks as wells. My econet number will always be my primary phone number. dont try to snatch me away from econet but give me things you know econet wont provide me.

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