Econet Media CEO Joseph Hundah has said the company going into administration and has already appointed Ernst & Young accountants to take them through this process.
Speaking to Business Day, Mr Hundah is said to have claimed that Kwese’s free-to-air business was too small to sustain its operations, but one has to wonder just how accurate this is and whether it is in actuality the root cause.
When Kwese was still operational, they failed to meet licence obligations and channels started randomly disappearing from Kwese’s content roster. Later on there were reports of failure to settle licence fees for content already aired (i.e World Cup and the NBA).
A different report from TechCentral, also claims that Econet Media’s debts had reached US$130 million before the company went into administration.
A letter written to creditors reads;
Around November 2018, management entered into settlement arrangements with most of the company’s creditors,” the letter said. “All creditors with balances of up to $100 000 were paid in full. In the most part, creditors of the company with balances of more than $100 000 were paid 15% of their balances with agreement that (1) a second instalment will be made by the company around May 2019 (25%), (2) a second instalment will be made by the company around August 2019 (25%) and (3) a final instalment will be made by the company around December 2019 (35%). The company was unable to meet the May 2019 instalment.
Econet Media is said to have set a deadline of 30 June to pay a US$35 million installment to their creditors but also missed that deadline.
If that is the case it’s no surprise that partners such as Roku have pulled the plug and stopped working with Econet media altogether, to the dismay of Kwese Play subscribers.
The letter also blamed the “current macroeconomic conditions” in Zimbabwe -“which is the company’s primary source of funding“- for the turmoil they are in. If we are being frank the decline of Kwese started well before things took a turn for the worst and Kwese was also operating in other regions outside Africa. More profoundly, if they splurged on rights for the NBA and all other shows on their platform primarily for Zimbabwean subscribers then they had no idea what they were getting themselves into from the start.
Overall, it seems Kwese tried to acquire more content than it could afford in a bid to lure subscribers who would then pay for this content and when the subscribers did not lineup in their numbers, Kwese found themselves in a hole of their own digging.
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5 comments
Letting subs pay in bond, for content that they had to pay for in US$ was always going to end in failure.
Useless! Makes you wonder about the wider Econet stable!
There is a small mind, pull them down mentality with TechZim articles which is ofcourse uniquely Zimbabwean. I’d like to believe its the same writter. You lead with negative shoddily written stories on Zimbabwean born companies even without full facts and often with a know it all attitude. Its almost like you are always rooting, waiting for Kwese to fail so you’re first to break the news. I remember again commenting on this again a while back. Be proud of your own be it they succeed or fail, you can still do that whilst still being objective. Let your articles look at the bright side, this encourages and lifts up other techpreneurs. How can I even try as one with a magazine like you, waiting to pounce and trumpet any slight setback?
Lool we were not waiting for kwese to fail Mr Steve. Which facts did we miss on this one. Would love your feedback.
Regarding the pull them down mentality you speak of, I can only say the following. We have broken good news countless times. In regards to Kwese Play, I myself (“the same writer”) wrote an article titled: The Kwese PLAY-ZOL Deal Is Not As Attractive As We Thought But It’s Still A Good Package which you can find here:
https://www.techzim.co.zw/2018/06/the-kwese-play-zol-deal-is-not-as-attractive-as-we-thought-but-its-still-a-good-package/
Was I also pulling down a local company in that case when I recommended the product?
It seems you yourself the judge of objectivity are not so objective after all. What hope is there for us mere mortals? Good day!
I’ll admit I cannot stop thinking about this comment.
When you say we pull these companies down, would you prefer that we keep quiet and not report on these issues? And what of the normal people who spent their hard earned money supporting Kwese by buying and subscribing to these services. First Kwese Satellite TV and now Kwese Play. What of those people? We keep quiet and act as if nothing is happening when the people who were promised a service don’t have that service delivered to them? We keep quiet when promises are broken and no communication is given to the customers who are supporting these local businesses?
Did you yourself buy these Kwese boxes and support Kwese as you claim to be a supporter of local companies? If yes, how do you feel about service not being delivered as promised and the lack of communication from the company you support seemingly blindly?
I don’t believe you’re a moron, but that comment was moronic…