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Minister says Econet buying expensive bandwidth from Liquid Telecom Group (Update)

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In a radio interview we posted earlier, the Minister of ICT, Supa Mandiwanzira revealed what could be a controversial arrangement between local mobile operator Econet Wireless Zimbabwe and its sister company Liquid Telecom Group. In his words:

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Out of the companies that are bringing bandwidth in this country, the company that brings bandwidth at the most expensive price is Liquid. TelOne brings in bandwidth, Powertel brings in bandwidth, Liquid brings in bandwidth. The prices between Powertel and any other operator, they bring in bandwidth in this country (at around), the maximum is US$120 per 1 Mega Bit per second. Liquid brings in Bandwidth at more than US $220 per 1 Mega Bit per second. And where do they get that bandwidth from? From Liquid Mauritius.

Liquid Telecom Mauritius is the holding company for Liquid Telecom Group. So, according to what the Minister has pointed out, Econet Wireless, which acquires its bandwidth from Liquid Telecom Zimbabwe, is essentially paying a significant premium on bandwidth to a sister company and yet other operators are able to bring bandwidth at half almost the price from cheaper alternative suppliers.

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This could have quite a number of implications and we will be updating the blog once we hear back from the group.

Update: An earlier version of this article had our comments and questions about implications of Econet paying more to Liquid Telecom for bandwidth than they could get from other companies. We have been however told that facts on the ground would answer our questions and, more importantly, significantly show a very different picture of the situation. We will post an update with these facts on the ground once we receive them as well as our comment on them.


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21 thoughts on “Minister says Econet buying expensive bandwidth from Liquid Telecom Group (Update)

  1. PowerTel providing bandwidth for Econet! Our minister lives in fantasy land where everything works from dreams.

    Powertel and Telone cannot provide stable and fast internet to the few thousand customers they have, how can they provide fast internet for millions of Econet user?

    1. FYI- Powertel does provide internet to Econet in some parts of the country where Liquid does not have presence.

        1. macd chip, before there was Liquid, Econet, Telecel used to buy bandwidth from Powertel. In fact, Ecoweb was one of the biggest clients to Powertel. Liquid only started digging around the country laying fibre in late 2009. Before then, even Econet’s mobile infrastructure relied heavily on Powertel. Econet used to have 3 E1 on Powertel’s fibre.

          1. Fair enough! Thanks for the heads up. But then Econet invested in growth.

            I bet my dollar that what was used by ecoweb is still the same capacity or slighly increased today.

  2. Telone – $120 for bandwidth that hardly works. Liquid – $220 for bandwidth that does. The implications are that we actually get the service we are paying for from Liquid.

    1. Kkkk you awesome man a $1 for $1, a nutshell for a nutshell that’s the deal the Minister is refusing to accept.

  3. I do not know what’s wrong with our government but they break everything they lay their hands on. There might be problems with Econet and Liquid but they should just let the markets correct it themselves. We have heard this nonsense before with people being accused of all sorts of things during the Zim dollar era. Hands off Econet guys if people are willing to pay more for Econet’s services leave us alone. There is a reason why we have fled from Powertel and Co.

  4. Minister, you get what you pay for, and in any case should not other IAPs be innovative in improving access and usage of the internet to improve their business instead of crying wolf because one company chooses not to do business with them.

  5. When your minister wants cheap things, he can say that, Cheap Internet = Cheap Speed = Frustration = Parasatals.

    Liquid is fast and no one can dispute that

  6. i think the minister is right to be worried, and releasing such important information to the public exposes some of the inhuman profiteering practices that affect us. there needs to be some level of regulation in the private sector otherwise people will be ripped off left, right and center. look at what is happening in the fuel industry, how can a bulk petrol seller sell their petrol for $1.15 – $1.22 a litre and yet retailers until recently were offloading their fuel and +/-$1.45/ltre. Its inhumane.

    1. Regulation and tariffs is the function of Potraz in telecoms and ZERA in energy. Ministers should talk policy formulation and monitoring for effectiveness only not operations, which is why we hear nonsense from Ministers! Unfortunately our regulators are also politicians equally useless.

  7. from a person who has someinsight. most operators to some extent use powertel fro connectivity in zimbabwe.

    1. As backup link l would say. When you want to provide the magic 5 nines sla uptime, you use every available link bt then set up priority policies according to the links you have.

  8. okay liquid buys bandwidth fro $220 and only charges me $49/month unlimited cdma dongle. Powertel $179/month unlimited for internet that barely works and is shaped so much i cant even stream anything

    1. The Minister likes making noises emotionally and he is clearly not an analyst. It is not only costs a business focuses on but revenues and profitability / Return on Investment. What the Minister has been saying since he got to the ministry confirms the country’s position in the bottom ten of the Economic Freedom Index

  9. Liquid has an SLA in place with 99.999% up time. How many diverse routes are they using. Lets be reasonable mr Honourable.

  10. Yes the minister should not stoop this low – BUUUUT, there is something fishy here! Ever heard of transfer pricing in order to move monies across Borders?

  11. I think its time for the minister to get a PhD, its now over due. If Econet are getting their liquid bandwith at double the cost, It would imply a boon for Powertel and other rivals, the Minister should be celebrating and take the econet clients.

    The minister of finance is the one who should be wary of transfer pricing and may need to investigate the cost model for econet. If he can prove money shipping, then I would support him even if he brings the sledgehammer on econet.

    Maybe that’s what the minister wanted to say, but becoz of little desktime, ended up getting lost in the semantics

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