Econet, Liquid Telecom pull out of Infrastructure Sharing debate

Tsitsi Mariwo from POTRAZ, leading the discussion on Infrastructure Sharing

Econet and Liquid Telecom have pulled out of the negotiations and policy consultations of telecoms network Infrastructure Sharing at the Second National Stakeholders Conference convened by telecoms regulator POTRAZ.

The two companies will not be party to finalisation of the discussions. This is despite the unveiled order given by the ICT Minister for the conclusion of the debate which began as way back as 2014.

Having been very vocal about its thoughts on the implications of infrastructure sharing, and because of its huge investment in telecoms infrastructure, Econet’s absence was rather conspicuous following its boycott of today’s meeting. It is not yet clear why, at the last minute, both Econet and Liquid have pulled out of a process that they have been part of from the very start.

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The assumption, however, is that Econet will have its first mover and capital advantage eroded by sharing infrastructure. However this may not be the bone or its argument.

Asked on the implications of such a move by these parties, the POTRAZ Acting Director of Legal Services, Mrs Tsitsi Mariwo says that the process will continue to formulate both policy and regulations up to a time when they become enforceable.

She also commented that according to the legal team that worked with all participants, there are no legal impediments restricting the process from continuing and could not shed light on the basis upon which Econet and Liquid may premise a legal challenge in the courts.

The recommendations for infrastructure sharing, in fact, were already provided for by the Telecommunications Act, as old as it is. Section II of the Statutory Instrument 28 of 2001 gives the authority (POTRAZ) some power to direct and compel licensees on issues of national interest.

In Section 6 of the new infrastructure framework, which will be shared on the POTRAZ website, the regulations go further to also give POTRAZ explicit powers to compulsorily compel players with penalties,  and also in Section 8, for failures where such parties cannot justify refusal to share infrastructure. We are yet to get a comment from Econet and Liquid on their actions today.

This a developing story and we will share any updates as the issue progresses.  

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38 Comments

  1. cry says:

    Awesome

  2. Sim says:

    So it seems Econet is prepared to flex its muscle..your move Hon. #interesting times

  3. Anonymous says:

    I personally think the lack of any tangible anti-competitive laws in the country has given birth to this monster we call Econet. Econet can make millions out of infrastructure sharing, however they persitently use the excuse that telecel/netone haven’t paid inter-connection fees, and so will be unlikely to pay for infrastructure sharing. This doesn’t hold up as they have recovered money using other means before.

    So now when Econet does get fined for not participating in infracture sharing, Econet will bitch and moan that it was not part of formulation process. To all those who will rush to defend Econet on this move, It is people like YOU who have enabled this mafia-corporation to operate in an anti-competitive manner and thereby preventing SME’s from reaching their full potential.

    1. Anonymous says:

      That’s complete BS. Econet shouldn’t be forced into this unfair arrangement. The GVT via POTRAZ is the one trying to flex its muscles out of desperation that they can’t successfully operate their own operators. No one in the right mind would want to invest in Zim under this conditions – e.g. when you’re successful the gvt step into the steal what you’ve worked hard to create. I’m all for Econet pulling out of these insane discussions.

      1. Anonymous says:

        It is common knowledge that infrastructure sharing benefits all parties involved. This “arrangement” has been legislated, its going to happen whether econet pulls out or not. Econet should be dictating terms inside the discussions instead of pulling out.

      2. Anonymous says:

        what econet is trying to do is maintain a hold on its monopoly status by preventing the other telecom operator’s from growing

      3. Paida says:

        it looks like you dont know how regulatory bodies operate

    2. papipacho says:

      And people like you, what have you done? So is it a crime that econet invested in its own infrastructure. This is a capitalist economy

      1. Anonymous says:

        I’m not sure you understand what infrastructure sharing involves. Econet is not being penalised for investing in infrastructure. The government is trying to prevent unnecessary duplication of infrastructure. When the US deregulated infrastructure and thereby promoted infrastructure sharing, there were skeptics but look at how all parties benefited there

      2. Anonymous says:

        What it is at the moment is a kid holding all his toys in the end and refusing to play along. Econet is and will always be a bully with its to there customers, competitors and another bully gov.

        There grown big which is good for them but are so old school and stagnant, thats it’s easier to keep people down. Growth, competition, innovation, diversity are things Econet will have none of that. There not confident in there own skills since the economy has always been in there favour

    3. Logic says:

      So you call Netone and Telecel SMEs? It could have been logical had there been a real company that is not connected with our government that only understands the language of milking companies (outside national interests). Who doesn’t know that when your money goes into the hands of the current Zimbabwean government it’s as good as gone without trace (though there is) but they make sure you won’t raise your voice. Subject to debate if you have facts to argue your position.

    4. Me says:

      Currently state owned telecoms companies are NOT remitting interconnect fees (these fees are part of the charge they charge per call, like tax), what guarantee is there that they will pay for riding on Econet/Liquid infrastaructure…??? If you can answer, problem solved or we are f****d as a nation….

  4. Raymond says:

    The reason why Zimbabwe does not progress is failure to attract Investors. This infrastructure sharing is yet another deterrent. Same with the Indegenisation laws . It is not right for Govt to hide behind POTRAZ for it is evident that Tel-One and Net-One stand to benefit largely. The Tel-One infrastructure is old and defucnt and everyone knows that.

    1. Machaya says:

      Defunct and old as you put, you will be surprised how much of this infrastructure TelOne is currently sharing with other operators. I am surprised with this notion that TelOne is salivating for Econet’s infrastructure. The company also has its premium assets which it can share with others for a fee, of course.

      1. Logic says:

        Which they will get payment for, one of the reasons why Econet is refusing to share infrastructure is that there is a culture and a history of defaulting from these companies who are pressing to have the deal concluded. I think if they want it to go through everything has to be made prepaid, they pay first and be given access.

        1. tinm@n says:

          That’s not even close to the primary reason. It’s purely business and competition.

  5. don says:

    I do not foresee Netone and Telecel being able to pay for this infrastructure sharing. If they are not currently paying for the inter connection fees, what will make them pay for the infrastructure sharing. POTRAZ should not be bullying Econet into this arrangement because it is tantamount to promoting a culture of punishing successful enterprises. Where is POTRAZ when Econet is crying about the millions owed by Netone and Telecel??? POTRAZ should first ensure that these are are paid so as to be a fair regulator and only then can we take them seriously about infrastructure sharing.

    1. Anonymous says:

      Telecel does not owe anyone in interconnection fees. It is telone and netone that owe telecel and econet interconnection fees. Government through Potraz tried to offset a huge chunk of that debt with the licence fees.

  6. Anonymous says:

    Im sure we have seen three towers in most areas one owned by Econet, the other by Telecel and the last one by Telone/ZBC/Netone (TZN). When econet and telecel where expanding their networks they requested for infrastructure sharing with TZN netone refused but ZBC and Telone gave these players some of their sites. The reason was simple, they did not want competition in that market area. Econet went on to build their own towers next to the TZN towers. Following in the footsteps of big brother, telecel would go on to request for permission for tower space but suprisingly big brother econet gave a simple response similar to that of Netone but in different words -“You can only do so after we have recovered our costs for installing such infrastructure”. This then led to a third tower being constructed.
    With the industry changing, econet becoming the major player and the cost of investment increasing, Netone approached Telone for space on Telone towers. They were given more than what they had asked for – part ownership. This so Telecel and Econet being given 24hr ultimatums to remove all their equipment from some of the Telone towers to create space for Netone. This lead to more towers being erected. After some time Telone then increased rentals on their towers to Telecel and Econet from around $300 per month to about $30000 per month. This was another way of saying remove your equipment from my space.
    After erecting about 1500 base stations and covering about 98% of the nation Econet are now asked to share their infrastructure after all that happened in the past?
    POTRAZ should provide statistics of infrastructure sharing to the public. How many netone sites are being shared with other operators big or small compared to the ones Econet and Telecel are sharing. When you see the figures refer to the above for explanations as to why it is so.
    This is just part of the infrastructure sharing fiasco…..Will comment about capacity sharing – This one involves Liquid

    1. otilia says:

      I agree with mr. anonymous though you speak from an informed position, I guess u are at either of the 2.
      well, the first line of argument has been the operationalization of the telecoms sector. we should never forget that the liberalization of the sector was with a lot of mixed feelings by the state. because of this, the state has been finding how best it should maintain players in check. you remember soon when the min was complaining that the state has lost control of information tech and as such its posing a security risk. we actually need to tread on with care as long as the status quo remains.
      however, the issue of infrastructure sharing to me its noble. the mistake which we made as a country was to allow what now appears to be irreversible, but we can still learn from our mistakes and map a way forward. honestly speaking, the duplication of such infrastructures leaves a lot to desire. we can not continue having such happening in as much as we would want to propel sustainable development in our cities and the countryside.
      it is very true that econet and telecel of late have been sharing towers at a considerable rate with the exception of net-one. we would have expected net-one to take the lead now that the debate is on by approaching either econet or telecel, but as we are speaking it is busy planting towers meters away from existing ones. I even wonder how they are securing development permits from councils for the councils were refusing permits if there is a tower nearby. then it speaks for itself that the playing field remains skewed to beat the defender.
      anyway, I keep on encourage all the players to cooperate with the regulator even though you think its an unfair affair of things.
      “that’s the state in business.”

  7. Anonymous says:

    but why changing rules pakati pe game.

  8. natty dread says:

    I and I is definitely behind econet on dis here issue of infrastructure sharing. Over the past few years econet has been investing significantly in its infrastructure in order to maintain its competitive edge in the telecoms industry. It also has fully paid its licence and is in compliance with its fiscal obligations. Potraz should have been in the forefront in the building of network infrastructure in the marginalised areas, asi the only notable Investment that Potraz has made is the construction of its huge head quarters in the plush suburb of mount pleasant. And who are those offices going to benefit?, no one but the big fish at Potraz. And now government is pushing for compulsory sharing of infrastructure, with entities that are renowned for not paying their obligations. You cannot allow dem big fish to continually trample pon your rights, you need to get up and stand up for your rights. Coz there is no telling what next these big fish will ask us to share!!!
    Dread out!

  9. nyasha says:

    i have been following this and there are few things i had like to point out
    1. the indegenisation law has done a lot of damage than good to our country, whilst it is a noble idea it lacks good implementation skills from gvt,
    2. the land reform was a noble idea even the former farmers knew it but we always lack implementation skils as a country.
    3. why should econet pay for potraz incompetence, potraz had the idea from start collected money for developing infrastructure but nothing is on the ground.
    4. while it is a brilliant idea to share infrastructure its common knowledge netone had widest coverage especially in rural areas, am not sure if econet requested share that infrastructure as suggested above, my question is potraz went sleeping while duplication was being done,
    5.the tone of the ict minister on deadline was offside, econet is not an enemy to the government infact it has a huge impact on the perfomance of the economy and alone has impacted on the way we communicate in zim.
    6.the government let this happen why didnt they licence other players in this sector, its common knowledge there are players who wanted enter zim.
    7 we desperately need capital in zim such noble ideas need a lot of care so that we dont hurt investors already on the ground and pontential. lets reward the hardworkers and allow time to formulate policy, why do we have to impplement such important policy with haste, i stand to be corrected our policies are always implemented with haste, laws must be made with the nation at heart, lets not make laws for current setups laws will work even 100 years to come, a classical example is with our constitution which was made with mugabe and tsvangirai in mind such a document is for life.
    8. econet plays victim at times but i fully feel for them, in a harsh enviroment as ours they managed raise capital without support from gvt.
    9. a lot of infrastructure need be shared i hope other ministers are listening, we have the zesa and zbc infrastucture, policy must be formulated now. i this the current zesa setup is good but we need go further make these companies ery independent so that ZETDC own the grid. allow other investors make power just as the law allows it and let the power companies sell power and distribute via zetdc.
    10 infrastructure sharing is noble in my hood one side of the road has liquid fibre the other side has telone, what an inconvinience wha a waste. sadly i have not seen anyone connecting coz of very high prices.
    11. infrastructure is not happpening in a vacuum lets acknowledge our history and resolve to solve challenges we face in a proffessional manner. econet has made a huge investment however infrastructure must be shared, but the solution is not an overnight one. we have become a too controlled economy it seems normal if you look at our history especially with price controls, exchange control but its such controls that kill a country, kills innovation, kills creativity. i would not carry on with my vision as a business person if i knew one day people would want to share my infrastructure in the future worse unfairly,
    ndapedza hangu.

  10. nyasha says:

    one of the reasons why i stoppped reading most of zim news and prefer other foreign outlets is due to lack of depth and analysis from writer. i quote one article by techzim “This is a project related to the Universal Service Fund (USF), a pool set up in 2000 which applies a levy to all licensed operators with the objective of spreading network rollout in neglected areas.”

    techzim you have all the info, why not put all these facts together and then we decide with a well informed decision, it is potraz who ashould have led in infrastructure sharing long back. they set up that fund. the question is what investment has been made in that area and has all players been paying their share, is netone paying licence fees, why is it netone is protected by gvt and then the same gvt wants to see fair play on the ground, has netone been punished for not paying interconnection fees, econet does not have all the money in this world, they borrow to invest pay licence fees and interconnection and you have other companies protected.

    further the government is promoting laziness or whatever it is by protecting netone,

    lets have fairplay on paying licence fees and other obligations including tax, let netone operate privately if it cant stand sell it or get investors take share of it.

    techzim an article must not just look at one side, we all love infrastructure sharing but u guys cover ict news lets have detail and critical analysis of what is happening on the ground when we look at econet with half infomation it seems they all wrong from beggining to end.

  11. nyasha says:

    @victor investigat the following comment and do a followup article:
    “Im sure we have seen three towers in most areas one owned by Econet, the other by Telecel and the last one by Telone/ZBC/Netone (TZN). When econet and telecel where expanding their networks they requested for infrastructure sharing with TZN netone refused but ZBC and Telone gave these players some of their sites. The reason was simple, they did not want competition in that market area. Econet went on to build their own towers next to the TZN towers. Following in the footsteps of big brother, telecel would go on to request for permission for tower space but suprisingly big brother econet gave a simple response similar to that of Netone but in different words -“You can only do so after we have recovered our costs for installing such infrastructure”. This then led to a third tower being constructed.
    With the industry changing, econet becoming the major player and the cost of investment increasing, Netone approached Telone for space on Telone towers. They were given more than what they had asked for – part ownership. This so Telecel and Econet being given 24hr ultimatums to remove all their equipment from some of the Telone towers to create space for Netone. This lead to more towers being erected. After some time Telone then increased rentals on their towers to Telecel and Econet from around $300 per month to about $30000 per month. This was another way of saying remove your equipment from my space.
    After erecting about 1500 base stations and covering about 98% of the nation Econet are now asked to share their infrastructure after all that happened in the past?
    POTRAZ should provide statistics of infrastructure sharing to the public. How many netone sites are being shared with other operators big or small compared to the ones Econet and Telecel are sharing. When you see the figures refer to the above for explanations as to why it is so.
    This is just part of the infrastructure sharing fiasco…..Will comment about capacity sharing – This one involves Liquid”

    when you investigate such comments including all being raised you will have good followup articles. remember the real news is in the comments. dont reapeat your saith like articles, where you investigate one side and ignore asking critical question like why?how?etc many people say econet plays victim but i beg to differ, they have things they do wrong but they are not always wrong.

    at one point econet shut off netone, and most dd not see the logic, they failing to collect fees owed and netone is protected, what fair competition is there when the refree is protecting certain teams, can you win the legue, lets look at all this

  12. Anonymous says:

    We can argue all day about the costs of infrastructure sharing. We can give accurate numbers of such and such a situation where one or other company practices unfairly, but all that doesn’t matter.

    Ideally all parties should share their infrastructure It would greatly reduce consumer costs and help the economy, e tc. But this Zimbabwe every major economic policy has been botched. And all of them could have been done right. Land reform could have been some without destroying agric. Same goes for what 51% empowerment did to industry.

    Government doesn’t do things without personal benefit. Once the law is in place there’ll be 100 new Telecoms companies none of them with a network. They will milk the cow til it’s dry. U can’t complain because “Iwe nyarara! Ndezve hurumende. Tisu tiri kutonga!”

    Not to mention The field day CIO will have because now they’ll be have free range over some of the secure networks.

  13. Ed says:

    When there is no vision people perish. This circus must stop. Why stiffle growth and innovation? Why deter potential investors by making unwise decisions?

    What does Econet and Liquid benefit from this sharing? Why is this coming up now? My opinion – they have all come to the sober realisation that they have failed to beat Econet in a fair match.

    Knowing a bit of networking, I think Econet will throttle traffic from the operators who want to benefit for sitting down and not paying licences.

    The best is for Potraz/ZBC/Telone/NETONE to humble themselves, organise a business management seminar and call Strive to lecture them on basics!

    My opinion….

  14. fourwallsinaroom says:

    but liquid already does infrastructure sharing. they did a deal with zesa.

  15. Richard says:

    Point of correction Econet’s 1500/towers cover 69% of the nation not 98% as we are being misled. So in that sense there is still room for infrastructure sharing on a negotiated basis not compulsory sharing as all people here seem to believe

  16. Ushe says:

    Ooga booga booga!

  17. maBlanco says:

    Better kuno fudza mbudzi hangu

  18. justin says:

    Econet is evil, but here, they are going against the devil, only one winner.

  19. madakadze@justice.com says:

    Infrastructure sharing is a noble idea the world over. However, in Zimbabwe it would be inconceivable as other players have always shown their unpreparedness to operate on economic terms. Companies that have consistently denied to pay their interconnection and licence fees would not bother making any contributions towards future infrastructural investments. Sharing infrastructure is good, BUT sharing it with Telecel and NetOne would turn out costly as they would just want to ride on Econet’s back. ICT is a dynamic field that needs constant investments and entering into a sharing pact with retrogressive elements will only complicate future capital investments in the field.

  20. Anonymous says:

    What it is at the moment is a kid holding all his toys in the end and refusing to play along. Econet is and will always be a bully with its to there customers, competitors and another bully gov.

    There grown big which is good for them but are so old school and stagnant, thats it’s easier to keep people down. Growth, competition, innovation, diversity are things Econet will have none of that. There not confident in there own skills since the economy has always been in there favour

  21. Khal Drogo says:

    Potraz is a toothless dog.

  22. tafara says:

    businesses that are inefficient and with poor strategies should be allowed to fail,and not be over-protected, and others with better approaches should be given a chance.

  23. richard says:

    The draft regulations have been adopted without Econet and Liquid Telecomm’s signatures, vachida vasingadi and that’s great news, part of the draft regulations say that if an operator identifies another operator’s tower or equipment which he wants to lease he can write to the operator and the operator has to respond within 14 days indicating if he can or cannot share the equipment and the reasons for the answer. if the operator intending to lease the tower is not satisfied with the answer he can approach potraz and potraz will conduct its own assessment , together with input from both operators and determine whether it is feasible to share the tower or infrastructure concerned.

  24. Antihighjack says:

    If they don’t want to share let it be. When they were digging up the whole country we thought they were crazy because even their competition were laughing at them and busy offering free calls. Now they want the spoils? What for?

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