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ICT Minister asks Econet to help NetOne, TelOne, gain market share through infrastructure sharing

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Supa Mandiwanzira

So the Supa Mandiwanzira radio interview by ZiFM Stereo’s powerful interviewer Ruvheneko Parirenyatwa made clear some of the perspectives of government in pushing for operators in Zimbabwe to share infrastructure. It helps you understand better the government’s (or at least the minister’s) thinking on the matter. I recommend that you take some time to listen to it.

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A number of times the minister effectively says that stronger operators who have bigger market share, must share infrastructure so that weaker players, who have smaller marketshare, are able to grow their marketshare and become more viable businesses.

You read that right.

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And here it is in his own words:

TelOne owes money to Econet, NetOne owes money to Telecel for interconnection fees. Now you either – as someone who’s owed money – continue to live in that situation where you’re continuously owed money, or you help that guy access better and more markets, so they can now begin to earn money, so that they can pay your debt. You can choose to do that.

It’s like a bank: they lend you money and you fail to pay the money. They either choose to sell your house, which they know will go for $150,000 but you’re owing $300,000. They can choose to do that and lose money. Or they can choose to say, “we’re now going to give you more money, so you can grow the business, so you’re able to pay us back”. It’s a simple concept.

This is interesting in that, actually in business you don’t try to help the competition take some of your market share. At the very least, you’d just be ok to have them in the market so that your subscribers are clear about the value you provide – because there’s opportunity for comparison. In business you try to own the market. Like Google owns search. They don’t try to help Bing provide better search results.

Secondly, the banking analogy the minister gives is broken. No bank manager says “Hey, you lost all my money, but here’s a bit more so you can work on recovering that lost money”. Well, unless they have strict conditions on how that money is going to be used. Conditions like appointing a new CEO (or leader to be general manager) and other stringent terms that ensure the same mistakes are not repeated. What demonstration has the government made to show they are differently behaved debtor from the one that owes millions in interconnection fees? Both at operator level and at macro national level? The state of the economy is very clear on what kind of debtor you’re dealing with.

But the thinking of entitlement to more money from the lender whose money you just lost may actually be understandable from a government perspective. Governments and lenders to government do that for and to each other. It doesn’t help ofcourse, but they do it anyway. See Greek crisis!

But even if the banking example made sense, Econet are not a lender so the analogy still breaks down. Again, Econet has no interest in increasing NetOne market share. In fact the interest they have is to grow their own. Grow the pie, yes; reduce general costs in the industry for everyone, maybe, but grow competitor market share? No.

What is interesting is that the minister is a business person himself (he owns ZiFM and has a film production  company amoung other assets) and he definitely understand the economics. This makes it difficult to understand if he believes in what he’s said.


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21 thoughts on “ICT Minister asks Econet to help NetOne, TelOne, gain market share through infrastructure sharing

  1. im shocked and worried about the ministers comments, and these are the young turks we thought and think will provide a refreshing look on things and help this economy in the right direction????? i think the minister is confusing his role and outlook as a businessman and as a politician, he has confused the two somehow. He is talking politically where he is supposed to excercise business Logic and the two just dont roll together!!!!

  2. I listened to the interview and there a few pointers relevant or not you decide.

    1. The minister’s langauge is now soft. He has backtracked on his dictatorship tone.
    2. The minister talks of tower duplication but runs away from pointing out what caused rather who caused this duplication. Netone did not want other players on their towers. This is the reason Econet has built more towers.
    3. I support the minister’s notion on active infrastructure sharing (local roaming). If Netone is not in Dotito then with my netone line I can be able to use econet
    4. The honourable minister continues to emphasize on cutting cost but who will benefit the most. Netone has no budget to built more towers. Telone has no budget to rollout their fibre project. Econet and Liquid have covered almost every profitable point with their towers and fibre respectively
    5. His tone also hints on bringing in an MNVO.
    6. Targeting Mr Masiyiwa is a low blow honorable. The directive from London is a result of unfair discussions meant to benefit your parastatals and disadvantaging Econet and Liquid.
    7. Ruvheneko mentions that what has happened in Europe will not work in Zimbabwe because of the ills that were done by our regulator. Why not come out with a Zimbabwe model that is fair as you say to create a win-win situation for all.
    8. Econet laying off employees is a result of the failed economy. Everyone is laying off including you the government.
    9. You say government has the biggest infrastructure yes but you forgot to mention Econet and Liquid have the most strategic and significant infrastructure for telecoms business.
    10. To support your notion of government having the biggest infrastructure footprint and having so many duplicated companies (Africom, Powertel, Netone, Telone & very soon Telecel) and also cost cutting may you please go it alone with a pilot project including all these entities so that we see the benefits of infrastructure sharing.
    11. Even though it was irrelevant USF came into the fray. Please advise the regulator on how many sites USF has covered. Where does this money to rollout USF base stations come from?

    1. +1. Techzim, please introduce a voting mechanism. Comments like these need to be upvoted, and find their way to the top of the comments section, (if not into the article itself, kkk)

  3. What do you expect from these half schooled Turks. His logic is unbelievably below what we expect from a minister. This is only valid thinking in Casinoland. Supa mush go buy a PhD, its overdue

  4. So the Minister wants infrastructure sharing to punish Econet for being successful and investing in the country when others did not. So now the real reason emerges. Little wonder Econet walked away. Investors beware.

  5. As much as I greatly dislike some of Econet’s practices, I will have to say Supa Mandiwanzira has a very skewed way of reasoning infrastructure sharing.

    If the aim is to help competitors gain market advantage over the back of another, then he is lost.

    That’s not even Zimbabwe’s economic model.

    Why doesnt ZiFM help up and coming Radio stations by offering them broadcasting time on their infrastructure?

    Its sounds ridiculous because it is.

  6. Me thinks with that recording and documents taken during discussions econet walked out off, they have a legal defence.

  7. Today, energy and information are the life blood of any economy, but with the ridiculous outbursts from the ministers in charge of these resources, there is no hope? Beneficiation and infrastructure sharing for example are important but they are usually part of a business plan and not a political plan, which concept I think might be an oxymoron?

  8. I want to start my radio station, can l share offices and equipment with ZiFM, can ZiFm also provide me with money to stabilise my business!

    If it fails, since lm already in their offices, they can trust l will not go anywhere and lend me some more money.

  9. But Zesa is sharing infrastructure with Liquid. And its such a smart arrangement. They swop STM’s on specific routes, provide capacity underground in order to access pylons for OPGW. Whats the issue here.

  10. @ Fourwalls, Zesa & Liquid (read Econet) went into talks without the intervention of stupid politicians ns. It was to the benefit if the two entities. Econet bought cars for Zesa. This other deal on forced infrastructure sharing is akin to compulsory acquisition.Remember they denied EcoCash the business to sell prepaid electricity despite its success in mobile money services. Varoyi ava

  11. In A very rare stance I support Econet and Liquid for pulling out of the sharing talks. Why should we continue to support failing organizations ?

    Why doesn’t Telone merge with Powertel amd share the resources they have between them and be “walking proof” that it will benefit us end users ?

    Well recently Netone advertised a tender for sourcing of 20 brand new vehicles . So they have money for cars and no money for infrastructures.

    Give us a break.

  12. Mirabile Dictu – Beyond Words! What more can I say and to who? If I say anything, I may confuse the nitwit brained minister and his entourage! No wonder the president READ A WHOLE STALE SPEECH and didnt even notice it!

  13. I do road runners. I give you one for ten dollars (They are more expensive) and you fail to pay and there is a likelihood of you starving before payment, so I give you another two to avoid total loss! Kikikikikikikiki!

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