Category: Telecommunications

  • Zimbabwe’s Mobile Networks Are Thriving—But Will Consumers Feel the Benefits?

    In the third quarter of 2024, Zimbabwe’s mobile network operators (MNOs) saw some interesting changes in their revenues, costs, and investments. Let’s get into it.

    Revenue Growth

    Mobile operators’ total revenue grew by 17.66%, reaching ZWG 3.40 billion (up from ZWG 2.89 billion in the previous quarter). This growth is a good sign, especially here in Zimbabwe, where the economy has been struggling.

    We have seen these MNOs post higher percentage revenue increases in the past, but in those times, there was significantly more currency instability. In a relatively more stable Q3 2024, a 17.66% revenue increase is impressive.

    Potraz suggests that this increase might be due to a stable exchange rate during this period, which helped businesses and consumers plan better. I think we can all agree that this was probably the biggest factor.

    One lovely benefit of this revenue growth is that companies usually invest more in their operations when they’re making more money, as you will see. We stand to benefit.

    Slower Rising Costs

    While revenues grew impressively, the operating costs of MNOs only increased by 8.62%, from ZWG 1.48 billion to ZWG 1.61 billion. This slower pace of cost increase compared to revenue growth points to better cost management, or it could just be that prices were exorbitantly increased.

    Essentially, operators are becoming more efficient in managing their expenses. Unfortunately, this efficiency came with retrenchment. As you may recall, Econet and EcoCash were reunited, and that whole reconstruction, as it’s called, was taking shape in Q3 2024. That led to some retrenchment to streamline the business and remove any duplicate roles.

    As you would imagine, remuneration is usually one of the biggest operational costs any business faces. So, when the biggest operator had those retrenchment benefits on its operational costs, it obviously helped keep sector costs lower.

    Anyway, for Zimbabwe, where inflation and economic instability have massacred the cost structure for businesses, this indicates that operators are learning to do more with less. The MNOs better do that, or they will follow the road OK Zimbabwe is on.

    The impact of the relative exchange rate stability in Q3 2024 cannot be underestimated. In a dual currency system, costs for things like equipment (priced in USD) can rise quickly if the local currency loses value. This puts pressure on operators to either absorb the costs or pass them on to consumers through higher prices. If there is no significant currency depreciation, then operating costs will be lower. It’s that simple.

    Big Jump in Investments

    The most significant change was in capital expenditure (CAPEX), which skyrocketed by 268%, from ZWG 164.77 million to ZWG 607.07 million. This means mobile operators are investing heavily in things like network infrastructure, such as upgrading to faster 4G and 5G technologies.

    You don’t need telling why this is great news:

    • Improved Services: More investment in infrastructure means better network coverage, faster internet speeds, and more reliable services for us.
    • Economic Growth: These investments can create jobs and stimulate the economy. For example, building new base stations or upgrading existing ones requires labour and materials, which can benefit local businesses.
    • Dual Currency Challenges: However, in a dual currency system, these investments might be complicated. The equipment is imported (and priced in USD), and operators need enough foreign currency to make these purchases. If the local currency weakens, this could become a challenge.

    Profitability

    The graph shows the trend in operating costs, revenues, and the cost-to-income ratio for Zimbabwe’s mobile network operators from Q1 to Q3 of 2024. Revenue has increased significantly from ZWG 0.91 billion in Q1 to ZWG 3.40 billion in Q3. Operating costs have also risen but at a slower pace, from ZWG 0.81 billion in Q1 to ZWG 1.61 billion in Q3. Meanwhile, the cost-to-income ratio has steadily declined from 89.01% in Q1 to 47.35% in Q3, indicating improved efficiency and profitability. This shows that despite rising operational expenses, revenue growth has outpaced costs.

    The Potraz Sector report for Q3 2024 shows that the financial health of operators improved, with better profitability ratios. This simply means that despite rising costs, operators are managing to make more money relative to what they’re spending.

    If operators can maintain this balance between revenue growth and cost management, they’ll be in a good position to keep investing in the network. Or give themselves huge bonuses if they so choose. However, if inflation or currency instability worsens, this balance could go out of whack.

    If operators are doing well financially, they might be able to offer more affordable services or better packages to consumers. This could be partly why we saw ZWG prices fall for some operators on select data bundles in February 2025.

    Why This Should Interest You

    The growth in revenue and investment means that mobile services are likely to improve in the near future. More reliable networks, faster speeds, and better services are a direct result of these investments. However, one key issue remains: the cost of mobile services.

    As mobile data usage increases, especially with the rise of unlimited data packages, affordability remains a concern. We might see a growing divide between the haves and the have-nots if the data pricing issue is not resolved. If you’re reading this you’re in the ‘haves’ camp.

    While the report indicates that MNOs are becoming more profitable and managing costs efficiently, the challenge remains ensuring that service improvements don’t come at a price too high for the average Zimbo.

    Conclusion

    In conclusion, the Q3 report shows a positive trend for MNOs in Zimbabwe. Revenue growth, better cost management, and huge investments in infrastructure highlight a sector that is preparing for the future.

    I would love to believe the hype that Starlink brought to the market may have influenced the huge infrastructure investments. The MNOs probably saw that the future could be stolen from them if they didn’t act.

    However, in a dual currency economy, the question remains whether Zimbos will feel the impact of these investments in terms of improved services without facing higher costs. For now, in mid-February, ZWG data prices have fallen for some, so yeah, these are good signs.

    Looking ahead, it’s likely that network improvements will continue, but the affordability of mobile services will remain a huge issue. For MNOs to truly succeed, they will need to balance the need for infrastructure development with the reality of the economic challenges faced by their customers.

    The #DataMustFall cries are still raging, and so that balance is yet to be struck.


  • Zimbabweans Are Using More Data Than Ever—Is It Because of Unlimited Plans?

    Globally, as internet access increases, voice calling falls. It’s not that people stop communicating; it’s that they use cheaper and superior internet-based calling. Zimbabwe will not be the exception, although voice has proved to have staying power in the country.

    Voice Traffic Declines in Q3 2024

    However, in the third quarter of 2024 (July to September), voice took a stumble. Mobile voice traffic fell by 7.46%. The telecoms regulator, POTRAZ, attributes this to internet-based calling.

    Mobile Internet Traffic Surges

    It will not surprise you, then, to find out that mobile internet traffic increased by a whopping 19.22%, from 65.75 to 78.38 petabytes (PBs).

    Econet was mostly responsible for this increase:

    The total number of active internet subscriptions was 12,042,864 in the quarter. That means a share of under 6.5GB per person in three months—or about 2.2GB per month—which is a bit higher than you would expect.

    A few heavy users are raising the averages. We obviously still have many people only utilizing the weekly $1 WhatsApp bundle, which is capped at 120MB. That means they use about 1.4GB (120 * 4 * 3) in a quarter, which is much lower than the total average of 6.5GB per mobile internet subscription.

    The Role of WhatsApp and Econet’s Limitations

    What I find interesting is that the biggest mobile operator, Econet, handicaps its WhatsApp bundles so that one cannot make calls with them. So, users of these bundles are not able to resort to internet-based calling.

    Plain old texting and voice notes have become popular too, leaving voice calls for only the most urgent situations. That also explains the drop in voice calls.

    Affordability Remains a Barrier

    We would love to see more people enjoy an uncapped, unrestricted internet experience. For now, although a 19.22% increase in usage is commendable, it would be much higher if the affordability problem was solved. The demand is there; prices just need to match incomes.

    The Impact of “Unlimited” Data Packages

    That said, I think we will see an even bigger jump in data usage in Q4 2024 because, for the first time ever, we saw unlimited mobile data packages hit the market and gain popularity.

    Econet’s SmartBiz package kept finding its stride in Q4, and Smart4You bundles started popping up. These packages, while not technically truly unlimited, are a far cry from the Private WiFi bundles we had before.

    As a result, only Econet saw its market share increase in the quarter.

    Econet – 76.18%, NetOne – 23.47%, Telecel – 0.35%

    Of course, we have Starlink to thank for this sudden innovation by the mobile operators. I don’t know why I said ‘operators’ in plural—we are still waiting for Econet’s competitors to launch their own competing products.

    Speaking of Starlink, it will be interesting to see what kind of impact it will have on all this. The unfortunate part for the mobile operators is that their heaviest users are the ones who can afford the satellite internet solution.

    That means their mobile data usage might drop as they utilize their WiFi more. They better pray that the work-from-home bug doesn’t hit because when one is mostly camped out at home, they don’t tend to use mobile data much if there is a WiFi connection available.

    Anyway, Starlink was only licensed at the end of the quarter and will start submitting its quarterly returns in Q4 2024. We shall see what’s what then.

    Conclusion

    The decline in voice calling in Zimbabwe is following a global trend, with internet-based communication becoming the norm. The increase in mobile internet usage will obviously be helped by the introduction of so-called “unlimited” data packages. However, affordability remains a key challenge, preventing even greater adoption.

    Starlink’s entry into the market has already pushed mobile operators to rethink their offerings, but its long-term impact remains to be seen.

    As internet access continues to expand, traditional voice calling may become even less relevant, only used for business and urgent calls. The next few quarters will provide more clarity on how deeply all this changes will change this sector. I think we are headed in the right direction.


  • RBZ’s High Data Pricing Solution Will Make It Worse

    The Reserve Bank of Zimbabwe (RBZ) is coming to make your data bundles more expensive.

    The central bank has mandated ‘fair pricing’ for internet data packages, presumably to address complaints about mobile operators favoring USD over Zimbabwean dollars (ZiG).

    Mobile network operators have been accused of offering promotions for internet data exclusively in USD, neglecting ZiG, which has apparently raised concerns among ‘stakeholders.’

    To be honest, it’s not just an accusation—it’s reality. Some bundles and packages are only available in USD for obvious reasons.

    RBZ is collaborating with POTRAZ and TOAZ to ensure compliance with the new pricing structure, with the Financial Intelligence Unit (FIU) overseeing adherence to ensure customers can buy data in their preferred currency.

    That would all be fine if the ZiG was widely accepted by the public and internationally. The reason operators want USD is the same reason we all prefer the greenback.

    Mobile operators also genuinely need USD for equipment and software—you’re not buying telecommunications gear at Willowvale.

    Effect of the ‘fair pricing’ directive

    We will see some of these promotional packages disappear, while others will become more expensive.

    That’s because, although the government insists the USD-ZiG exchange rate is one way, the streets say otherwise.

    So, if mobile operators use the official exchange rate to convert USD packages to ZiG, they would be much cheaper in ZiG.

    This would lead the ever-clever Zimbos to “burn” their USD to buy the same bundles in ZiG, dumping the unwanted ZiG onto mobile operators.

    Then, with less USD revenue, mobile operators would have to rely even more on the RBZ for forex it doesn’t have.

    Alternatively, mobile operators could raise their USD prices so that the ZiG values aren’t too low, which would also lower USD sales.

    Any Zimbo currently living in the teapot knows this is not rocket science—it’s exactly what happened to big retailers.

    So, while it sucks that those earning in ZiG can’t access certain USD-only packages, trying to fix that the way RBZ wants will only make things worse.

    Something needs to be done—data is too expensive for economy-ravaged Zimbos—but this ain’t the solution.

  • Zim Businesses Embrace the Internet (But There’s Room for Growth)

    Here at Techzim we believe in the power of the internet.Our about section communicates that we obsess “about the opportunity of tech particularly the internet for individuals and businesses in Zimbabwe and the greater African region.”

    So, it was with keen interest we looked at the results of a survey conducted by the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) in partnership with the Zimbabwe National Statistics Agency (Zimstats). It was called the 2023/24 Information and Communication Technologies (ICT) Access and Use by Businesses Survey.

    The survey was on the use of ICT in Zimbabwe and was supposed to run from 20 February to 1 March 2024. The major objective was to determine the levels of access and use of ICTs by businesses.

    We have not looked at the actual report but are working with the highlights as reported by The Standard. They got ‘exclusive’ access to the report.

    Key findings from the survey include:

    Internet Usage: Overall, 94.2% of institutions utilised the internet.

    Internet Activities:

    • 94.8% used it for sending or receiving emails.
    • 88.4% engaged in social media activities.
    • 73% sought information about goods, services, customers, or suppliers.
    • 62.1% received orders online.
    • 59.8% placed orders online.

    Sector-Specific Internet Usage:

    • Finance and insurance services, ICT, and utilities sectors reported 100% internet usage.
    • Transportation and storage sectors had a 99.4% usage rate.
    • Construction industry reported 98.6% usage.
    • Professional, scientific, and technical services recorded 97.1% usage.
    • Public administration stood at 96.3%.
    • Manufacturing sector reported 95.3% usage.
    • Support services and other activities were at 93.4%.
    • Wholesale and retail trade – repair of vehicles were at 92.9%.
    • Real estate activities reported 88.5% usage.
    • Accommodation and food services had a 87.5% usage.
    • Mining and quarrying reported 81.8% usage.

    Gut reaction

    If someone were to ask about the opportunity of the internet for business operations, you would have to narrow it down to improved communication, cost savings, increased productivity and efficiency, better marketing and customer engagement, access to information and analytics for informed decision-making and access to global markets. There are other advantages but these could be considered the most important.

    We find from the report that most businesses (94.8%) are using the internet to improve communication which is easier via email. I would like to imagine that those not using email are using other online communication tools like WhatsApp. I refuse to believe its phone calls and printed out memos doing the rounds.

    The power of social media is now clear for everyone to see as indicated by the fact that 88.4% engaged in social media activities. It should have been 100% but maybe we’ll get there by the next such survey.

    I find the fact that only 73% of businesses use the internet to seek information about goods, services, customers, or suppliers surprising. It should be much higher than that. It’s information that should improve operational efficiency.

    Companies are leveraging the internet to stay informed about market trends, competitors, and customer preferences, enabling them to make data-driven decisions. Why weren’t 27% of surveyed businesses doing the same? It might boil down to arrogance (we already know what we need to know to thrive) or ignorance (we don’t know how to use the internet for that).

    E-commerce

    Then there is the e-commerce bit. It appears we still have ways to go. However, considering where we are coming from, it is impressive that more than half of the businesses (62.1%) receive orders online, reflecting a shift towards e-commerce and digital sales channels.

    While this is a promising figure, it suggests room for growth in adopting online sales systems, particularly for smaller or traditional businesses that may still rely on offline channels.

    Slightly fewer businesses use the internet for placing orders compared to receiving them, possibly due to supplier limitations or the nature of their procurement processes. This gap suggests potential for growth in Business-to-Business (B2B) e-commerce platforms and the digitization of procurement processes.

    For business to consumer e-commerce, we cannot pin it all on the businesses. There still is apprehension in the public about placing orders online. So, it is quite impressive that 62.1% of businesses reported receiving orders online. One of the major things that helped this figure grow is the tweak to allow cash on delivery even for online orders.

    That said, the fact that when businesses are dealing with each other, they place even less orders shows that the bottleneck might not be the consumers but the businesses themselves. Which could be understandable when you consider that B2B transactions often involve complex procurement processes, requiring more formal negotiations, contracts, and approvals compared to B2C.

    Sector specific usage

    There wasn’t much to talk about on the sector specific usage except that it would have been embarrassing if the ones for ICT companies and financial institutions were not 100%.

    I was surprised by the Utilities one (100%) if I’m being honest even though I’m aware that the internet supports billing, customer communication, smart infrastructure management, and operational monitoring for them.

    Finance and Insurance heavily dependent on the internet for online banking, customer management systems, payment processing, and cybersecurity. For ICT companies, the internet is the backbone of operatiions making 100% usage expected.

    At first glance, you would be surprised to see Transport and Storage at 99.4% usage but it makes sense if you think about it. Adoption of technologies like GPS, online booking systems, and supply chain management tools is driving this high percentage.

    Ww won’t get into all sectors but the last one we will touch on is the Public Administration 93.6% usage. I would not have guessed it would be that high. The government has been talking about the digitisation of government services and public sector operations and it appears they are making progress.

    E-governance initiatives, online service delivery, and internal administrative efficiency are driving this usage

    That’s it

    We shall talk more about this survey when we get the full thing. We would like to know what kind of institutions they surveyed. I would imagine smaller businesses were underrepresented. We shall dig into it later.

  • Strive Masiyiwa honoured by Harvard for his contributions to ‘the culture’ and social justice

    Does Strive Masiyiwa need introductions in Zimbabwe? Well, I suppose some of the Ama2000s that did not live in a pre-Econet world might not know who he is. They also might not know just how much he has done for and in Zimbabwe.

    Masiyiwa is the founder of the Econet Group and Cassava Technologies. The Zimbabwean tech scene economy would be vastly different had those organisations not existed.

    Through the success of these businesses, Masiyiwa contributed to the development of Zimbabwe, both through the technology they introduced and the taxes the businesses paid. However, Masiyiwa went beyond this, giving back to the community through various philanthropic ventures.

    I remember back in high school—quite some time ago for me—some kids whose fees were paid by the Higherlife Foundation. Some of them even received scholarships to attend college abroad.

    At the time, I didn’t know that Higherlife Foundation was a Masiyiwa initiative. It’s wild to think that I have friends who benefitted from his financial support. It’s even wilder to consider that many of you might know someone who did as well.

    After all, they say over 300,000 people have received these scholarships over the years, most of them Zimbabwean, I imagine. So, chances are, you know someone who’s been a recipient.

    I’m mentioning all this because Strive Masiyiwa has been honoured for this work and more.

    Harvard honours Strive

    Masiyiwa has been awarded the W. E. B. Du Bois Medal by Harvard University for his significant contributions to African and African American history and culture.

    The man’s trophy cabinets must be overflowing with plaques and awards by now. He has been honoured numerous times over the years.

    Strive was among eight honourees recognised at the ninth Hutchins Centre Honours for their work in advancing social justice and combating racism, sexism, and xenophobia etc.

    His achievements in telecommunications, philanthropy, social justice, and his leadership roles in global organisations and public health were highlighted.

    Regarding those leadership roles, the Ama2000s who love their Netflix might be interested to know that Masiyiwa is on the board of the streaming company. Millennials are more impressed by him being on the National Geographic Society’s board. He’s involved in several other boards and such.

    Their efforts [Strive and his wife, Tsitsi] to tackle public health challenges have seen Masiyiwa play a leading role in the fight against HIV/AIDS, Ebola, malnutrition, and COVID-19. As the African Union’s Special Envoy for COVID-19, he spearheaded efforts to manage the continent’s response to the pandemic.

    In recognition of his leadership in agriculture and food security, particularly as Chairman of the Alliance for a Green Revolution in Africa (AGRA), Masiyiwa was awarded the prestigious Norman E. Borlaug World Food Prize Medallion.

    Like I said, his trophy cabinets must be overflowing. But it’s not just him—some of the other honourees have quite the collection too. Spike Lee, whom you might know as the director of Malcolm X and He Got Game, was honoured as well, as was LeVar Burton.

    Not the time to hate

    I think we should celebrate philanthropic work like this. It gives people like Strive the strength to keep going, and hopefully, it inspires other businesspeople to follow suit.

    There will be a time to pick a bone with Masiyiwa for whatever ills you attribute to him or his companies. Now is not the time, the man has been honoured and as fellow Zimbos whose flag he is flying high, we celebrate with him. Way to go Strive.

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  • Econet has been on a network upgrade spree, I fear the competition is falling hopelessly behind

    It wasn’t too long ago that we were all complaining about the quality of service Econet was providing. Indeed, some still voice these concerns, but most of us should have noticed a significant improvement.

    I’m one of those who have seen these improvements. I don’t make enough regular voice calls to comment on any reductions in call drop rates, but when it comes to internet reliability, I’m well placed to share my experience. I’ve been a happy camper these past few months.

    The first major change I noticed in my neighborhood was the introduction of Econet 5G.

    Econet 5G

    This came with improvements. I’m enjoying incredible speeds and have only experienced a single slowdown, which happened on a day even Liquid Telecom faced issues.

    In the past, only those lucky enough to win the “neighborhood lottery” got to enjoy such service. Econet claims to have turned this around. They’ve been on an upgrading spree, and most users should be seeing the benefits.

    Econet network modernisation

    Econet’s capital expenditure for the financial year ending February 2024 amounted to ZW$1.9 trillion (approximately US$127 million), a substantial 363% increase compared to ZW$0.4 trillion in 2023.

    It seems this rate of expenditure has continued into the current year. I got 5G after the February 2024 cutoff for the reported figure of roughly US$127 million.

    The capital expenditure was primarily directed towards the network modernization program. Key investments included:

    • Upgrading network infrastructure: Over 1,012 sites were modernized with 4G high-capacity base stations, focusing on Harare, Bulawayo, and the entire Manicaland region. Econet plans to modernize another 550 base stations after February.
    • Installation of new base stations: 50 new base station sites were added, expanding network coverage and likely improving service quality.
    • 5G deployment: 5 new 5G base stations were installed during the year, bringing the total to 27. I received 5G service after this, so more 5G base stations have been added since February 2024.
    • Renewable energy solutions: Efforts continued to deploy renewable energy solutions to address power outages and maintain high uptime at base stations.

    What this means

    The above explains why Econet is confident that network challenges should be a thing of the past for most users.

    Notably, Econet was also provided with spectrum in the 700 MHz range by the telecoms regulator. As Econet puts it, “Spectrum refers to radio frequencies present in the air that telecom companies use to provide connectivity services.”

    Econet says the 700 MHz band will “extend the coverage of existing base stations to serve customers who are at the periphery of the current coverage limit.”

    You see, the 700 MHz frequency band can travel longer distances and penetrate buildings, walls, and other obstacles more effectively than higher frequency bands.

    It’s excellent for expanding coverage in both rural and urban areas where building new infrastructure might be costly. In other words, it allows Econet to provide reliable service across wider areas with fewer base stations.

    As you can see, 700 MHz is a big deal. Here are some of its benefits in short:

    • For Econet, this spectrum allows better network traffic management and the capacity to handle future increases in data traffic and support emerging technologies.
    • We will experience stronger signals inside buildings, leading to fewer dropped calls and better data connectivity indoors.
    • We can expect consistent service even in congested areas, as Econet can offload some capacity from the frequency bands currently in use to the newly allocated 700 MHz range.

    One horse race

    Econet has long acknowledged that the challenges we were facing were real. Back in 2021, they said:

    Our infrastructure requires continuous improvement in order to continue providing service at the quality and scale demanded by our customers. This has not been possible in the current environment due to the unavailability of foreign currency.

    There were years of underinvestment, and we all noticed it. But Econet seems to have found a way around this problem.

    We’re all aware that the foreign currency shortage hasn’t really been resolved. In fact, it’s predicted to worsen with the government talking about accelerating de-dollarization efforts.

    So, if it’s not because foreign currency is suddenly more available, how did Econet solve the puzzle? Partnerships, that’s how. As Econet stated:

    Our strategic partnerships with key equipment vendors have enabled us to accelerate our current network modernization program after several years of underinvestment.

    We don’t have the details of these partnerships, but it’s clear there wouldn’t be any upgrades without them.

    My concern is that Zimbabwe’s telecoms race is going to become even more lopsided than it already is. It’s not just Econet whose equipment was outdated—the competition is facing the same problem.

    With both NetOne and Telecel performing poorly, are they in a position to secure partnerships that would allow them to upgrade their own networks? I think it’s a tall order, short of the government injecting money it doesn’t have into these companies.

    Econet is only going to increase its dominance. But perhaps that won’t be the case, and maybe I just won the neighbourhood lottery this time around. I’m curious to know if you’ve experienced the improvements these upgrades should bring.

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  • Econet posts a net loss despite about a billion USD in revenue, how does that happen?

    The biggest mobile network operator in Zimbabwe, Econet, recently released its annual report for the year ended February 2024. I still find it frustrating that we only get to examine Econet’s financials, while the competition can remain as secretive as it wants.

    Anyway, we will be digging into the Econet report, but first, let’s hit the highlights.

    If you had forgotten how dominant Econet is, feast on this: they report:

    • 10.44 million active customers (out of 16.8 million connected customers)
    • 69.7% of mobile subscribers
    • 83.7% market share of internet and data traffic

    Positives

    The report shows growth in key areas. Revenue, adjusted for inflation, reached ZW$14.8 trillion, marking a substantial 133% increase compared to the previous year’s ZW$6.3 trillion.

    I know those figures might seem abstract. Zimbabwean currencies are always in flux, and it’s hard to recall how much a trillion was worth in February.

    Unfortunately, the country was in a hyperinflationary period, so while we can convert those figures at the prevailing exchange rate at the end of February, it will only give a rough idea of their actual value.

    At the official rate of 1:15,000 as of the end of February, revenues would be roughly US$987 million. I know some may balk at the idea of Econet collecting nearly a billion in revenue, but that sounds about right. Back in 2018, when financial statements were in USD, Econet reported revenues of $831 million.

    This growth was fueled by a 363% surge in capital expenditure, which rose from ZW$0.4 trillion in 2023 to ZW$1.9 trillion in 2024. This capital expenditure deserves its own discussion, but for now, we can note that Econet invested roughly US$127 million in equipment.

    This investment in infrastructure led to better service and higher revenue, as expected.

    The company’s earnings (EBITDA) also demonstrated significant growth, reaching ZW$7.1 trillion, a 175% increase from the previous year’s ZW$2.6 trillion. Remember, this is how much money Econet made from its core operations before considering things like taxes, loan payments, and depreciation.

    So we’re saying Econet made roughly US$433 million from its core operations—a massive 175% increase from the previous year’s $172 million.

    So those are the positives:

    • A 133% revenue increase to about a billion USD
    • 363% increase in money spent on equipment etc to roughly US$127 million
    • 175% increase in money made from core business to roughly US$433 million

    The loss

    Despite these positive indicators, the company reported a net loss of ZW$1.1 trillion (roughly US$73 million), a significant increase from the ZW$0.3 trillion loss in 2023.

    Wrap your mind around it: nearly a billion dollars in revenue, yet a loss of about $70 million.

    There are a few factors to consider to make sense of this:

    First, Econet incurred substantial exchange losses due to the depreciation of the ZW$. You’ll remember how quickly that currency lost its value.

    These exchange losses amounted to US$213 million (ZW$3.2 trillion), or 22% of revenue. These losses are not related to the company’s operational efficiency but rather to external economic conditions. It’s the price you pay for operating in Zimbabwe.

    The increase in capital expenditure also affects profitability. Econet saw a notable increase in depreciation and amortization expenses. These non-cash expenses reduce net income, even though they do not impact cash flow directly.

    Another factor is hyperinflation. The distortions caused by hyperinflation can lead to discrepancies between operational performance (revenue and EBITDA) and the net income figure.

    Finally, there’s taxation. Econet’s tax increased by 85% to roughly US$253 million (ZW$3.8 trillion).

    So, just tax and exchange losses wiped out 50% of revenues. I consider exchange losses a kind of tax because they result from the government’s monetary policies affecting currency stability.

    With all this in mind, you can better understand how nearly a billion in revenue and close to half a billion in operational income can still lead to losses.

    That said, this was a 245% increase in losses, which is concerning, regardless of the caveats we discussed.

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  • Liquid looking to raise $225m this year, US govt agency to be one of main investors

    We discussed Liquid Intelligent Technologies facing some financial challenges. The company recently had its credit rating downgraded by two of the largest credit agencies in the world.

    The company is saddled with debt amounting to US$930.6 million, and some of that debt is due soon. Bloomberg reports that there is a $156 million loan due in 2026. This was previously reported as $179 million earlier this month, which could indicate that part of it has been repaid. This loan repayment is due in March 2026.

    Additionally, there are $620 million in bonds due that same year. That’s a significant amount of debt payable in a short period.

    We discussed what Liquid could do to navigate this situation. Fitch Ratings suggests they could work on refinancing the debt (negotiating the terms of the loans).

    However, Fitch highlighted that any refinancing efforts would likely depend on Liquid securing external funding, among other factors. Liquid is working on it.

    Liquid to raise $225 million

    According to Liquid CEO Hardy Pemhiwa, the company seeks to raise $225 million in equity by the end of 2024.

    Remember, equity refers to capital raised by selling shares or ownership in Liquid. In simpler terms, it’s a way for the company to generate funds without taking on additional debt by bringing in new shareholders who contribute capital in exchange for a stake in the company.

    Out of that $225 million, Liquid expects to secure about $90 million in the next few weeks. The Liquid CEO first mentioned the $90 million back in June 2024.

    US government agency investing in Liquid

    The United States International Development Finance Corporation (DFC) will be one of the main investors, according to Pemhiwa.

    The DFC will be a significant participant in the first $90 million and will also be involved in further funding rounds.

    The DFC is a development finance institution and an agency of the United States federal government. It invests in development projects primarily in lower- and middle-income countries.

    It “partners with the private sector to finance solutions to the most critical challenges facing the developing world.”

    The DFC has invested billions in the developing world. The DFC reports having financial investments, loans, guarantees, or other financial commitments totaling $41 billion across its portfolio in 112 countries.

    That may be, but it’s not every day we hear about the U.S. government investing in African companies with Zimbabwean connections. So, it is a big deal.

    Some speculate that this investment is influenced by the geopolitical competition between the U.S. and China.

    The U.S. and China are competing for influence in Africa, driven by Africa’s growing population and its rich mineral resources, which are valuable for global supply chains, especially in technology and energy sectors.

    The DFC is one of the tools the U.S. uses to engage economically with African countries. By providing financial support, investments, and development projects, the DFC helps the U.S. establish and strengthen economic ties with African nations, countering China’s influence in the region.

    How to spend $225m

    Returning to the $225 million that Liquid is looking to raise, not all of it will be used to repay the loans we discussed.

    Liquid has several projects in the pipeline. Pemhiwa mentioned a few as reported by Bloomberg:

    • Liquid is collaborating with Microsoft and Google on broadband projects in East Africa.
    • The project with Microsoft focuses on delivering affordable broadband to 20 million people in Kenya and Zambia through last-mile connections.
    • Liquid will partner with Google to expand terrestrial fibre networks across South Africa, Kenya, Uganda, Rwanda, Zambia, Zimbabwe, and the Democratic Republic of Congo.
    • This fibre route will connect multiple data centres and offer an alternative pathway for internet traffic in case of a subsea cable outage between South Africa and Kenya.

    I also imagine that projects like the private 5G network in partnership with Globalstar will be funded as well.

    So, the $225 million will help fund these projects and also go towards repaying or refinancing the looming loan and bond repayments.

    Also read:

  • Liquid’s new partnership brings next-gen private 5G networks to Zimbabwe and beyond

    Liquid Intelligent Technologies and Globalstar have formed a partnership to deliver advanced 5G connectivity solutions across Africa, the Middle East, and the Gulf. Liquid will have exclusive rights to sell and distribute Globalstar’s XCOM RAN private networks 5G access solution in these regions.

    When you hear ‘5G’ or ‘AI,’ you might think, ‘Here we go again with the buzzwords.’ But this partnership is genuinely beneficial. It will provide much-needed services.

    Understanding XCOM RAN

    XCOM RAN stands for Xtra Capacity Outdoor Mobile Radio Access Network. Simplified, it’s like a supercharged Wi-Fi router that creates a private network for a specific group of people, ensuring they get all the bandwidth they need—a private wireless network.

    XCOM RAN is complex, but the essential point is that it delivers impressive capacity gains. It outperforms new 5G NR systems significantly in both downlink and uplink, using the available spectrum more efficiently while providing better performance, flexibility, and coverage.

    The Globalstar CEO efficiently summarised what it is all about:

    We have significantly increased the amount of data that can be transmitted over a given spectrum allocation, while improving other performance measures – all within a flexible solution that provides the ability for future performance improvements.

    It’s used in places like mines, where machines need to communicate instantly and reliably. It’s also used in other industries where even a small delay can be costly or dangerous. It’s not meant for the masses but is perfect for mines, big factories, airports, and similar use cases.

    Why choose this over satellite?

    You might think, ‘Isn’t satellite internet meant to serve mines and other remote places?’ Why would a mine choose XCOM RAN over options like OneWeb (which Liquid has partnered with), Starlink, or even Globalstar’s own satellite offering?

    You’re right that setting up a satellite connection is generally cheaper. Setting up a private 5G network involves:

    1. Small Cells: These provide localised 5G coverage and are smaller and less expensive than traditional macro cell towers used for wider area coverage.
    2. XCOM RAN Equipment: This includes hardware and software that manage the network, handle data traffic, and provide essential services like authentication and security.

    This setup is more expensive than satellite internet, which primarily requires a satellite dish and modem at the user’s location, with the main infrastructure cost borne by the satellite provider.

    However, cost isn’t everything. Some applications require low latency, higher capacity, and customization and control. For these, a private 5G network is vastly superior to satellite.

    For those who need reliable internet, it’s a big deal that XCOM RAN technology is coming to Zimbabwe and the other mentioned regions.

    Liquid Intelligent Technologies and Globalstar partner to deliver high-speed 5G access solutions across Africa, the Middle East, and the Gulf

    Liquid Intelligent Technologies (Liquid), a business of Cassava Technologies, a leading technology group is pleased to announce a strategic partnership with American connectivity innovator Globalstar to deliver advanced 5G connectivity solutions across Africa, the Middle East, and the Gulf.

    Strive Masiyiwa, founder and Chairman of Liquid Intelligent Technologies said, “I’m really excited by the connectivity solutions now emerging from breakthroughs in 5G private networks technologies. With this technology we are now able to provide services to large businesses like mines with their own 5G private networks that can also enable NextGen services like AI; this is huge”.

    The partnership will provide Liquid with exclusive rights in the Gulf, Middle East and Africa regions to sell and distribute Globalstar’s XCOM RAN private networks 5G access solution. This innovative
    technology that enhances the 5G experience, also supports AI-driven applications and is set to revolutionise the mining industry in Africa and high-end markets in the Middle East and Gulf regions.

    “We look forward to the opportunities this exclusive partnership with Globalstar will unfold for our existing and potential customers in these sectors. Globalstar’s unique 5G enterprise solution will enable us to provide unparalleled connectivity to our customers on the continent, aligning with our ambition of becoming a leading technology company of African heritage, empowering businesses and communities with the reliable and high-speed internet access needed to thrive in the digital age,” said Hardy Pemhiwa, President and Group CEO of Cassava Technologies.

    Liquid will provide comprehensive customer support for Globalstar’s products and services, including technical support and warranty services. The collaboration also includes potential expansion to Globalstar’s satellite, Band n53 spectrum and IoT solutions on a non-exclusive basis.

    “Globalstar is pleased to join in partnership with Cassava and Liquid, a group of well-respected
    leaders with a sharp focus on technology deployments.”, said Dr. Paul E. Jacobs, CEO of Globalstar.
    “The regions where Liquid is a leader are large and growing markets for our technologies which enable safe automation and remote control of mobile equipment in high value environments.

    Our 5G XCOM RAN product fundamentally differs from traditional wireless solutions and enables mission critical high performance wireless applications. Combining XCOM RAN with the globally licensed Globalstar n53 midband spectrum , creates a very unique offering for private and enterprise 5G networks. Together, Liquid and Globalstar will accelerate advanced wireless technology deployments in Africa, Middle East and Gulf regions.”

    The partnership between Liquid Intelligent Technologies and Globalstar is yet another achievement, reiterating Liquid’s commitment to partnering with global organisations that share the aim to foster progress and innovation through connectivity for businesses and individuals on the African continent and beyond.

    Also read:

  • Are we being sold air pies by the telecoms firm that says it wants to invest $200m in Zimbabwe?

    Clear Mobitel CEO Mr Harpal Mann. Image Credit Clear Mobitel

    You know, hyperinflation really messes up your evaluation of numbers. As a former gazillionaire myself, I don’t really appreciate that a million is a lot of money, even with $7.52 in my bank account.

    That said, it is significant that Clear Mobitel’s CEO says he is willing to invest $200 million in Zimbabwe. In any country, and especially in Zimbabwe, a $200 million investment is substantial.

    All that is true, but we need to make sure we aren’t being sold air pies here. As they say, talk is cheap. We need to know who these guys are and if they have the capacity to do what they say they intend to do. Did they even commit to anything? Let’s explore it all.

    First, here is a quote:

    I am happy that we have managed to engage in some fruitful discussions with the government. I am impressed by the country’s business environment and prepared to invest US$200 million because of the open-for-business policy in Zimbabwe.

    He says Clear Mobitel has grander ambitions and Zimbabwe is merely the first destination in SADC they are targeting:

    We want to start in Zimbabwe, which has a conducive business environment. Our objective is to eventually spread our wings to the rest of the region.

    What conducive business environment?

    The CEO seems to be in awe of the country’s business environment. That is interesting. If you were to ask any startup about that same environment, they would wonder if he knows what ‘conducive’ means.

    It’s not only startups that have concerns; larger enterprises in this country are always complaining about the environment. So, what is Clear Mobitel talking about?

    First, like him or hate him, President Mnangagwa has been harping on about Zimbabwe being open for business since the day he took office after the not-a-coup.

    It’s just that we haven’t had many takers, but you can’t say he hasn’t invited investors.

    I also must acknowledge that I think the Zimbabwe Investment and Development Agency (ZIDA) is doing a good job. I think they have made it easier for foreign investors to come to Zimbabwe.

    So, I think that might be why Clear Mobitel is praising the country’s business environment. The conversations they have had have probably been pleasant as we indeed roll out the red carpet for foreign investors.

    I have no problem with that; in fact, I praise it. I only hope that we do the same for local entrepreneurs. Let’s make it easy for them to set up shop too.

    The phoney-sounding statements

    I know many were thinking it. The CEO’s statements sound a little too diplomatic and flattering. He says he wants to invest in Zimbabwe because of its open-for-business policy. Then, he repeats that he loves our business-conducive environment.

    See, a conducive business environment involves a regulatory framework, political stability, infrastructure, access to finance, a skilled workforce, policies and frameworks that promote innovation and research, a good legal system, and other factors like that.

    I don’t know if we can say Zimbabwe ranks highly on those factors. However, there is an opportunity to make money in the underfunded telecommunications industry that Clear Mobitel operates in.

    So, yes, his statements were meant to be flattering and diplomatic because it’s the practical thing to say. He couldn’t just come right out and say, “We think there is a chance to be a Tora Mari United that makes huge profits by operating in this country.”

    So, don’t mind the politically-sounding statements he gave. That’s how the game is played.

    Fruitful discussions with the government

    These discussions are exactly what convinced Clear Mobitel to consider Zimbabwe. I think we can forgive Zimbabweans for fearing the worst when they hear this. What does fruitful mean?

    If Clear Mobitel knows what they are doing, they would try to negotiate the best terms for themselves. I imagine they found the Zimbabwean government amenable to some of their proposals or ideas.

    As The Chronicle put it, “The President also said there was an array of fiscal incentives that stood to benefit investors who chose to do business in Zimbabwe.”

    It’s only practical for the government to offer these incentives. If we didn’t, we wouldn’t have any investors knocking on our doors. So, I guess we are bending over backwards for Clear Mobitel, and I’m not really mad at that.

    One only hopes that’s where the conversations ended. One hopes there aren’t any personal terms stuck into the whole deal, but if history serves, that’s unwarranted hope. You can bet your bottom dollar that there are politicians who will be looking to personally benefit from such an investment.

    Anyway …

    Who are Clear Mobitel?

    I’m pretty sure almost none of us knew about this company. I mean, how could we, when they were only active in faraway countries and not at a scale that we would have heard about them?

    First off, the company exists and is registered in the UK. We’ll talk more about that registration later.

    The primary objective at Clear Mobitel is to lead the next wave of 5G Ecosystem technologies for FWA (Fixed Wireless Access), Private 5G Network services, and cutting-edge smart and secure mobile connectivity solutions.

    They claim to do a lot – 5G private networks, rural broadband, AI, smart cities, traveling e-SIM, data centres etc.

    There are reports of Clear Mobitel is using Japanese NEC’s Standalone (SA) Cloud Native Core Network solution in the UK to “accelerate the delivery and adoption of advanced 5G services.”

    They are present in a few countries, apparently. Clear Mobitel is providing a 5G radio frequency service in the Channel Islands as CEO Harpal Mann operates a mobile communications business in the UK and conducts IDC projects in New Zealand and the United States.

    Dormant company?

    Back to that registration. The company is registered in the UK as a private company, so we can’t really dig into its affairs.

    It was first registered in 2009 but was dormant for several years, as seen by a series of dormant company accounts filed from 2016 to 2022.

    The financial statements for 2021 came out in mid-2022 and were titled ‘Dormant accounts.’ They showed the company had only £1 in cash, which was also the only capital in the company.

    The company was dissolved via compulsory strike-off on April 13, 2021. On July 8, 2021, an administrative restoration application was filed.

    There was some activity in 2022 according the latest statements. The founder and CEO lent some money to the company. Note that I said he lent money to his company, payable within a year. He did not contribute it as capital. Capital in the company in 2022 remained at £1.

    Those are the latest financial statements we found. All we have after that is a confirmation statement filed at the end of 2023, which has no updates. This implies there were no changes to company details, including share capital. So, Clear Mobitel had share capital of £1 at the end of 2023.

    From there, we jump to the NEC story we discussed earlier in February 2024 and then to considerations of investing $200 million in Zimbabwe.

    Listen, I know that as a private company, Clear Mobitel can be as vague about its financial status as it wants. This means the filed statements we discussed above do not necessarily paint the most accurate picture.

    Maybe they have $200 million to invest, colour me sceptical. I hope I am wrong and that the accounts above only demonstrate how useless unaudited private company financial statements can be.

    What I am certain of is that calling Clear Mobitel a ‘giant global telecoms firm,’ as state media are doing, is a little ridiculous.

    Real deal or nah?

    I’m not trying to rain on the $200 million parade we have going on here. I’m not conclusively saying Clear Mobitel is selling us pipe dreams. You have all the information I have now. Do you think they are legitimate, or should we get some Pepsis to drink with our air pies?

    A company that was momentarily struck off the companies register in 2021 and that has exactly £1 as invested capital is prepared to invest $200 million in Zimbabwe. There is a Shona saying that goes, “Totenda dzanwa.” It means we are skeptical and would be pleasantly surprised if it works out.

    I didn’t even mention that there is no firm commitment. Clear Mobitel has merely expressed interest, and business is like dating and romance—flirting with us does not mean it’s a done deal. Rejection is more bitter when your object of interest seemed interested. If we end up in a relationship with Clear Mobitel, cool; if not, I’d be disappointed but just as cool.

    Also read:

  • Liquid Intelligent Technologies in some financial bother, credit rating downgraded

    Liquid Intelligent Technologies is in a bit of a bother. The company’s credit rating was recently downgraded by rating agencies Fitch and Moody’s. Don’t worry, we are about to break down what it means.

    First, the main points as reported,

    • Credit Downgrade: Fitch and Moody’s downgraded Liquid’s credit rating due to potential breaches of debt covenants.
    • Financial Challenges: Moody’s downgraded Liquid from B3 to Caa1 due to substantial risks. The company’s net debt is $930.6 million. Fitch downgraded Liquid from B to CCC+.
    • Market Reassurance: CEO Hardy Pemhiwa mentioned a $90 million cash injection, including an investment from the US International Development Finance Corporation.
    • Debt Covenant Issues: Liquid has a R3.3 billion ($179m) loan due in March 2026, with relaxed covenants stepping down in August 2024.
    • Liquidity Concerns: Fitch highlighted Liquid’s weak liquidity position and reliance on external financing. The company’s cash reserves are declining, with ongoing foreign exchange pressures.
    • Refinancing Needs: Liquid is discussing refinancing its R3.3 billion term loan, contingent on additional funding and lower leverage.
    • Potential Crisis: Fitch warned that without successful refinancing, Liquid could face a debt restructuring event and further downgrades.

    The highlighted issues

    Liquid has a net debt of $930.6 million, with about $179 million (R3.3 billion) due in March 2026. That’s a massive amount that needs to be paid back in only 19 months’ time.

    The organizations that lent to Liquid were, of course, wary of Liquid taking on additional debt to the point where it might not be able to repay any of it. This concern is not unique to Liquid; all lenders are cautious about borrowers taking on too much debt.

    According to the agreements Liquid had with its lenders (debt covenants), the ratio of their debt to earnings could be 3.5x, but this would be reduced to 3x by the end of August 2024.

    In simpler terms: The lenders set a limit on how much debt Liquid could have compared to its earnings. Initially, the lenders allowed their debt to be up to 3.5 times their earnings. However, that leniency was temporary. The lender will soon tighten the rule back to the original limit of 3 times their earnings. This means Liquid Telecom has a deadline to reduce its debt or increase its earnings to meet this requirement.

    Liquid’s net debt-to-earnings ratio was 3.47 as of the end of June 2024. There are doubts that Liquid will be able to reduce it to 3x by the end of this month.

    For simplicity, as most aren’t finance people, when we say earnings, know that we mean EBITDA. Earnings tell you how much money a company actually makes after all expenses, while EBITDA shows you how well the company is performing in its core business activities by excluding certain expenses.

    In this article, earnings = EBITDA = how well Liquid is performing in its core business by excluding some expenses that have nothing to do with the core business.

    Lifeline?

    Back in June 2024, Liquid CEO Hardy Pemhiwa said the company was nearing a $90-million (R1.7 billion) cash injection in fresh equity (new money pumped in by shareholders).

    That should help with the debt versus earnings ratio. However, the credit agencies say that even if Liquid used the whole $90 million to pay off the debt, it still wouldn’t be enough to avoid breaching the 3x requirement.

    Liquid would still need to see its earnings rise substantially, in addition to the whole $90m going to pay off the debt. Remember, there is an August 2024 deadline looming, and the credit agencies say there is a huge risk that Liquid won’t be able to pull it off by then.

    Hence the credit downgrade.

    In reality, Liquid won’t use the entire $90 million to pay off debt. And besides, there are doubts they would have received the full $90 million by the deadline.

    The highlighted liquidity concerns

    At the end of the previous financial year, Liquid had $57 million in cash, but most of it came from loans. In the first quarter of the current financial year, their cash reserves dwindled to $48 million, primarily due to high expenses and unfavourable exchange rates.

    Fitch believes Liquid can avoid a cash shortage if they receive the first part of the $90m ($23 million) and $25 million in income from their data centers. This money would help pay down debt and cover operating costs. However, this might not be enough to prevent them from breaking the terms of their loans (covenant breach), which could lead to penalties.

    Fitch also highlights that the second part of the $90m might not come in time. If this second investment comes through, it could provide an additional $34 million, which would further improve their financial situation.

    The credit downgrade

    The downgrade reflects Liquid Telecom’s weak liquidity position and heightened refinancing risk.

    Fitch

    Fitch Ratings and Moody’s Investors Service are two of the “Big 3” credit rating agencies. These agencies assess the creditworthiness of borrowers, including companies and governments.

    Liquid’s credit downgrade signifies a substantial increase in credit risk. Credit risk simply means the risk that a borrower won’t repay a loan or debt.

    This downgrade indicates that Liquid’s debt is considered highly risky, as there is a higher probability that it won’t be able to pay its debts.

    Downgrades like these often lead to reduced investor confidence in the company. Investors may demand higher interest rates on new debt or may be hesitant to invest at all.

    In fact, Liquid will now expect to face increased borrowing costs (higher interest) if it tries to raise additional capital through debt financing.

    As you can see, the downgrade has serious implications for Liquid.

    The reason Liquid is in this predicament is due to financial challenges, namely high net debt and a high debt-to-earnings ratio, which simply means the amount of money it makes (earnings) does not look good compared to the money it owes.

    So, to be downgraded makes a bad situation even worse. The downgrade will put further financial strain on Liquid, as it will likely face higher interest payments even on existing debt and increased difficulty in refinancing its debt obligations.

    What Liquid can/should do

    There is a lot that Liquid can do to get out of this situation. In fact, Fitch says that for Liquid to actually default on its loans, a lot would need to go wrong. We’ll get back to what could go wrong later. First, what can Liquid do?

    The obvious option is refinancing. Liquid could approach its lenders, particularly for the $179 million loan due in 19 months’ time, and negotiate. They could secure a lower interest rate or even extend the repayment date beyond March 2026.

    However, there would be some requirements from the lenders if they are to adjust the terms of the loan. Fitch says reduced discretionary capital expenditure, better working capital management and operating efficiencies, and external funding could help with refinancing.

    Fitch believes Liquid could pull off a refinancing agreement. However, such a deal would likely hinge on a few factors:

    We believe timely refinancing is contingent on material additional external funding, lower leverage, and positive operating cash flow, excluding Zimbabwe, after the impact of foreign exchange to service higher interest rates on new debt.

    Fitch

    There’s a lot packed into that statement. Liquid must improve its overall financial health by securing more funding, reducing debt, increasing earnings, and ensuring stable cash flow from its core operations while accounting for the volatility and financial impact of its Zimbabwean operations.

    Let’s break it down

    • Material Additional External Funding: Liquid needs to secure significant additional funding from external sources. This could be through new investments, loans, or from shareholders putting in more money. New loans wouldn’t help as much as shareholders pumping in more money.
    • Lower Leverage: Liquid needs to reduce its debt as compared to earnings (lower leverage). This involves either paying down existing debt or increasing its earnings. Easier said than done.
    • Positive Operating Cash Flow: The company must generate positive cash flow from its operations, meaning its revenue must exceed its operating expenses.
    • Excluding Zimbabwe After Foreign Exchange Impact: The calculation of positive operating cash flow should exclude the financial performance of its operations in Zimbabwe. This exclusion is necessary because of the adverse impact of foreign exchange rates, which can complicate the company’s overall financial stability and ability to service debt.
    • Higher Interest Rates on New Debt: Any new debt that the company takes on will likely come with higher interest rates. Liquid needs to ensure it has enough cash flow to meet these higher interest payments.

    From the outside, it looks like it will be a mammoth task. It appears that Fitch says Liquid needs this to be able to refinance. However, some of what is required to refinance is exactly what refinancing should help solve.

    A lot would need to go wrong

    We return to that. For Liquid to actually fail to repay its loans, Fitch says it would be due to the following factors:

    • Higher competitive intensity,
    • Increased technological risk,
    • Loss of key contracts,
    • Adverse regulatory or political actions, or
    • Considerable currency depreciation in key geographies.

    I gotta say, I believe Liquid will pull it off. However, I think some of these factors will pose challenges.

    We expect to see higher competitive intensity for Liquid. For the year ended February 2024, Liquid reported that network services (primarily long-haul, metro networks, and roaming services) contributed 70% of total group revenue.

    While low-earth orbit satellite services are still far from dominating, there is a high risk that they will substantially affect Liquid’s competitiveness. Liquid has mitigated the risk by partnering with a satellite service provider.

    However, we cannot ignore that Starlink and other such services likely will provide competitive intensity.

    This also represents increased technological risk. Liquid has a huge fiber network in Africa, but low-earth orbit technology threatens the competitive advantage of that infrastructure.

    Could the hype around satellite services lead to the loss of key contracts for Liquid? The reliability of fiber over satellite means that risk is low for huge contracts with large enterprises.

    However, individuals are a different matter. Could we consider a large block of high-net-worth individuals jumping ship as the loss of key contracts? To some extent, yes.

    Southern Africa, where Liquid is dominant is a little unstable at the moment. The ANC party in South Africa has lost majority control for the first time, and there’s the ever-unpredictable Zimbabwean government to deal with. As a result, the risk of adverse regulatory or political actions is high.

    It’s also rather unfortunate that the new currency in Zimbabwe, the ZiG, is already showing signs of rapid collapse.

    Little old Zimbabwe

    Zimbabwe remains important to Liquid’s bottom line.

    • For the year ended 29 Feb 2024, Zimbabwe operations contributed 24.4% ($167.6m) to the group’s total external revenue of $686.7m.
    • Zimbabwe operations significantly impacted the group’s net foreign exchange loss, contributing 93.4% ($407.4m) of the total $436.4m net foreign exchange loss.

    This indicates that while Zimbabwe represents about a quarter of Liquid’s business, its currency issues are weighing the group down. This is why Fitch suggests excluding Zimbabwe when calculating the impact of positive operating cash flow to refinancing negotiations.

    The impact of foreign exchange rates can complicate the company’s overall financial stability and ability to service debt. So, for those sceptical about the impact of Zimbabwe’s currency woes on company performance—what more do you need to hear?

    We asked Liquid Zimbabwe what, if any, impact the move from the ZW$ to the ZiG will have on this foreign exchange loss problem. Said Liquid Zimbabwe,

    Liquid Intelligent Technologies Zimbabwe believes that the ZIG has brought stability and predictability and curbed the FX losses that we used to face in the country due to the ZWL and arbitrage. We are confident that we can plan and execute our business initiatives positively, as the ZIG has, overall, brought a positive outlook to the economy, our local operations in Zimbabwe, and the Liquid Group in general.

    Liquid Zimbabwe

    As you can see, the ZiG has transformed Liquid’s outlook. Zimbabwe incurred $407 million in exchange losses last year, but with the more stable ZiG, Liquid appears to believe that figure will drastically drop.

    So, I guess this means Fitch’s suggestion to exclude Zimbabwe due to high exchange loss risk can be reconsidered.

    It appears that while many are skeptical of the ZiG’s impact, it has provided some relief. That’s a no-brainer, as it has been more stable than the ZW$ was in its final days. The question is, how long will it remain somewhat stable? None of us can answer that.

    Also read:

  • DFA enters the chat with unlimited fibre packages starting from $97 at 25Mbps

    It was just yesterday when we were talking about the excitement surrounding satellite internet, especially the low-earth orbit kind that Starlink and OneWeb offer, and how some mistakenly think fibre internet has no place in the future of Zimbabwe because of it.

    Fibre will always have a place, as there are plenty of applications that satellite internet just isn’t suited for. Today, we talk about one fibre player some of you are aware of – DFA Zimbabwe.

    We have talked about them a few times:

    The company has been operating in the country for about three years but was launched in 2007 in South Africa. You may not have been aware of their presence because of the kind of customers they served.

    DFA has been operating on a wholesale basis, which meant they were mostly serving mobile network operators (MNOs) and internet service providers (ISPs).

    Remember, DFA Zimbabwe built a fibre network, i.e., they laid fibre cables underground. The last update on that network was when they launched one that stretches over 1,500 kilometers throughout Zimbabwe, connecting Harare, Bulawayo, and Victoria Falls, and linking the country to South Africa, Zambia, Botswana, and Mozambique.

    They then rented out the use of their cables (and related infrastructure) to the MNOs and ISPs. Those customers (channel partners) of theirs were then free to use the service or resell it to their own customers.

    So, some of you were getting internet service from Company A, but the service was utilising DFA’s network. Those aren’t details you necessarily cared about, and so you were never told.

    You have seen this before between ZOL and Liquid Telecom, as we knew them back then. ZOL was an ISP and was one of Liquid’s customers, utilising Liquid’s fibre infrastructure. Liquid then acquired ZOL back in 2012, and they have been joined at the hip since.

    There are some differences, but it helps to think of DFA as being in a situation similar to the one Liquid was in before the ZOL acquisition.

    Liquid acquired ZOL to get into the ISP game. With the ZOL acquisition, they moved from primarily serving ISPs and MNOs to serving businesses and individuals too.

    DFA is similarly moving from primarily serving ISPs and MNOs to serving enterprise clients. They say they will now be serving both large and small businesses.

    Serving them with what?

    DFA Services

    Dark fibre

    If you had forgotten, dark fibre refers to unused fibre that is available for lease. The one who leases it needs their own equipment to transmit data.

    This is what MNOs and ISPs like. They get to lease the unused fibre and manage their own network using their own equipment. It’s the laying of fibre underground bit that they don’t like.

    DFA gives the example of connecting base stations and points of presence to core networks and mobile switching centres as an application.

    So, this won’t be a solution for small businesses. However, large enterprises, data centres, and organisations with high data transmission needs and technical expertise to manage their own networks can also utilise dark fibre.

    Managed/LIT services

    Here, DFA will manage the network for users. Instead of dark fibre, this is called lit fibre because DFA supplies and manages the equipment needed to transmit data over the fibre.

    This is what we are most used to. Customers then get packages that include data transmission services, bandwidth, and other network management features.

    The target customers for these services are businesses that require high-bandwidth core network connectivity. The applications that DFA cites are more familiar; cloud computing, enterprise resource planning, video conferencing, and similar needs.

    Businesses that are geographically dispersed will also benefit from long-distance service. Large businesses with multiple branches in different cities can make use of this.

    International private leased circuit

    For businesses that are spread out over multiple countries, DFA will “connect offices, branches, and subsidiaries around the world.”

    They also allow businesses to host regional websites and services, among other things.

    Internet services

    This is where our small businesses come in. DFA now has broadband internet products aimed at SMEs, retail businesses, or any business, really. They even say their broadband services are suitable for some individuals.

    The applications are what you would expect: basic operations like web browsing, email, cloud applications, and everything small businesses need the internet for.

    For businesses that are heavily reliant on cloud applications for daily operations, there is also the option to get dedicated internet access. DFA says it delivers high-performance, secure real-time connections for a seamless cloud experience.

    Satellite internet

    Before you get too excited, DFA is not using the low-earth orbit satellite tech that the likes of Starlink and OneWeb are using, for now. It’s the old VSAT we are used to. At the conclusion of 2023, DFA reported that they had connected over 1200 schools and clinics using VSAT.

    However, DFA says they are working on partnering with a low-earth orbit provider just like Liquid and TelOne did. So, expect them to offer the same kind of service in the future.

    Prices

    Fibre

    The part we were waiting for. How much does all this cost for us regular folks?

    When it comes to fibre, DFA has a few unlimited packages:

    • $97 for unlimited data at 25Mbps
    • $135 for unlimited data at 50Mbps
    • $170 for unlimited data at 100Mbps

    Installation costs $285.

    As you can see, although it is marketed towards businesses and high-net-worth individuals, anyone who is a fibre user can access this.

    For comparison, Liquid is running a promotion that offers a $99 unlimited package at 75Mbps. Those are significantly faster speeds for $2 more. The only caveat is that Liquid’s is a promotional package, but they say it will run for an indefinite period.

    So, it appears unlimited fibre data plans can now be had for less than 3 figures in Zimbabwe. This is a welcome development. This is why I believe Liquid won’t end that promotion; it will simply become the standard.

    If you were wondering how that stacks up against first-world countries, in the U.S., fibre plans cost between $50 and $300 for download speeds of 100-1000Mbps. So, Zimbabwe is slowly starting to make sense.

    As you would imagine, when it comes to fibre, we don’t have 100% coverage in the country. So, most neighbourhoods in most towns won’t have coverage. You can check with DFA to see if your neighbourhood is covered.

    VSAT

    If you’re interested in VSAT packages instead, here is how it looks. They say the most popular packages include:

    • 20GB at up to 25Mbps for $65
    • 30GB at up to 25Mbps for $81
    • Unlimited data at 5Mbps for $155

    The VSAT equipment will cost $350, and additional installation fees will apply based on the survey.

    This is why VSAT was never really an option for individuals. It’s expensive for what you get. However, it was the only viable option for remote locations, and so DFA connected over 1200 schools and clinics using it.

    I think this part will be disrupted by the low-earth orbit tech, which offers faster speeds, lower latency, and lower subscription costs (although equipment costs, in DFA’s case at least, favour VSAT).

    It’s a good thing, then, that DFA joins Liquid and TelOne in partnering other companies to offer low-earth orbit offerings.

    Competition is good

    Make no mistake about it, at the moment, Liquid remains the biggest fish in the pond. They have the largest fibre network and the most customers.

    However, there is enough cake for everyone in the fibre game, and DFA has a place. There are still plenty of areas without fibre coverage.

    I am curious to see if the popularity of satellite internet will lead to lower investment in fibre networks. I hope that won’t be the case; we need both options in as many places as possible. However, realistically, we are likely to see only minor fibre network upgrades going forward.

    It will be a hard sell to investors and shareholders to invest millions in fibre when viable alternatives are becoming more accessible.

    Also read:

  • Liquid’s frequent service disruptions might prematurely push users to satellite

    The hardest thing to do as a human being is to be unbiased and objective. It is especially hard when you have parted with your hard-earned money for a product or service. There are two main ways you might review the product or service if it is of subpar quality.

    The first is the copium method. See, we humans do not like to feel like chumps. Sometimes, you will find people defending a service provider who swindled them because they don’t want to appear gullible.

    The best example of this was when the metal-unibody iPhone was prone to bending and dropping signal. We saw fully grown adults, who were not affiliated with Apple in any way, parrot the company’s propaganda that humans just weren’t holding their phones correctly.

    The second way of coping with bad service is to paint the service provider as the devil incarnate who set up an elaborate scam to fleece the public. Here, the goal is to clear one’s perceived gullibility by pointing out that the other party is an evil Goliath they couldn’t possibly fight.

    Telling this kind of person that there are some valid reasons why the service provider failed to deliver will be met with hostility.

    However, life is not that black and white. There are always nuances that need to be considered, so let us attempt to talk about service disruptions with all this in mind.

    Liquid Home internet disruptions

    Check this screenshot out:

    It shows a list of notifications from Liquid Home about service disruptions. Mind you, there are more before these, and one is just fresh off the press. I received one this afternoon.

    Now, I am glad that these notifications are being sent out via SMS to all affected customers, rather than waiting for them to call customer care asking why they can’t watch their Cocomelon videos on YouTube.

    I am also glad that in the last message, they told us what caused the disruption—road works. It’s a little thing, but it goes a long way. When left in the dark, humans fill in the blanks with all sorts of crazy conspiracies.

    So, I believe the communication aspect is being handled much better now. One time I called, and the welcome message informed users of a service disruption, the areas affected, and how long they expected to sort it out. I didn’t even need to speak to an agent after that.

    Why so many though?

    Do note: the internet (for fibre connections) comes through cables buried underground. When those cables are cut, there is no internet service.

    Accidental damage

    One of the main causes of fibre service disruption is construction and excavation activities. A few years ago, a farmer in the Beitbridge area put the whole of Zimbabwe on its knees.

    Now, with so many roadwork projects going on in Harare right now, more frequent fibre cuts are to be expected. It’s mainly so in Zimbabwe because, at the best of times, internet access providers, utility companies, construction firms, and municipal workers have terrible communication.

    The likes of Liquid and TelOne won’t exactly come out and say it, but the city knows where all fibre optic cables are. Should they communicate this effectively with their construction partners, there wouldn’t be nearly as many fibre cuts.

    Accidental damage also comes from vandalism and natural disasters. In some areas, rats and other rodents are known to chew on cables.

    In all the above, the internet provider is not to blame, for the most part.

    Infrastructure issues

    Nothing lasts forever. Not even the mighty fiber optic cable is immune to wear and tear. So, older fibre networks are more prone to damage, especially when they haven’t been properly maintained or upgraded.

    Human error and poor initial installations can be factors too. For example, we talked about rodents chewing through cables. Some experts will tell you that only happens when there isn’t proper cable protection and rodent control.

    Another main issue with initial installation is burial depth. I have conversed with some experts who tell me that much of the fibre network in Zimbabwe is not buried deep enough. If it were, they claim, we wouldn’t have farmers willy-nilly crippling the country.

    There is also the fact that cable choice matters too. Substandard cables can be just as bad as poor installation practices in the long term.

    Get me right, I’m not saying Liquid, TelOne, Dandemutande, and others are guilty of all of the above. I’m saying these are some of the reasons that could lead to frequent service disruptions.

    Maintenance and operational issues

    We touched on this already. Insufficient maintenance and inspection of fibre networks can lead to undetected problems that eventually cause cuts.

    Just from that, you can imagine how the forex-starved internet providers have fared with their maintenance and upgrade schedules. They have told us, often and loudly, that they have not been able to maintain their infrastructure as they should. Hence the frequent fibre cuts.

    When talking operations, we cannot ignore power cuts. Frequent power cuts can affect the operation of equipment that powers fibre networks, leading to an increased risk of damage. Power cuts are back with a bang, and so that contributes to the problem.

    Is fibre doomed then?

    One might then wonder if investing millions in laying fiber is still a worthwhile venture. Or, from a customer perspective, if getting a fibre service as opposed to satellite (which Liquid and TelOne have announced they will support soon) is a good idea.

    Well, all things being equal, fibre should be more reliable. Satellite internet, especially the kind that Starlink and OneWeb provide, gets frequently disrupted through obstruction.

    When talking about a properly maintained fiber network, satellite internet is inferior in most ways.

    I realised that some didn’t know that for many Starlink users from all over the world, video calls can be tricky. Starlink regularly has short ~1-second outages that disrupt video calls and other real-time applications.

    Some experience frequent call drops, which fibre users don’t have to deal with. We won’t get into it, but it can be caused by variable bandwidth, weather, moving from satellite to satellite, etc.

    That said, you can see how the frequent fibre disruptions experienced by Liquid and other fibre companies make this negative for Starlink less of a problem. If I can’t count on fibre to be reliable, or if satellite ends up being more reliable in Zimbabwe, what then?

    So, I guess it’s a good thing that Liquid and TelOne have committed to working with OneWeb for satellite internet provision.

    So, yes, fibre still has a place in the future. That takes nothing away from satellite’s 100% coverage benefits.

    Unfair fight?

    Satellite internet providers have an addressable market of billions of people and so, despite high costs to set up fleets, they can absolutely shake up the pricing strategies of fibre companies.

    I bet the fibre companies must be thinking, “Those lucky satellite bastards have their most expensive and critical equipment up in space. There, no vandals, rodents, farmers, or construction workers can cause you a PR nightmare with one swift action. There, you don’t have to coordinate with a nonchalant city about planned construction projects. The satellite bastards can connect some recluse out in the middle of nowhere at no extra cost.”

    That’s what disruption looks like, I guess. And that is why Liquid’s frequent service disruptions might push users to satellite faster than they would have adopted it. Even if some of the reasons for the service disruptions are not of Liquid’s doing.

    Also read:

  • AG fears NetOne might not be able to meet obligations and continue operations, let’s talk

    We already talked about how NetOne has cost you and me hundreds of millions over the last few years. Government lost at least US $200 million through NetOne in just 2 years – AG’s Report.

    NetOne is a state-owned enterprise, and you and I are the state. The government owns 100% of NetOne, and the government is simply a collection of people we have put in charge of our business as Zimbabweans.

    So, it is a shame that, for the most part, those we have put in charge are not always forthcoming with details on how our businesses are doing.

    I was especially disappointed when 21 such public entities, including NetOne, were exempted from complying with the law that exists to ensure transparency, fairness, accountability, and efficiency in public procurement processes.

    This is why we value the few times we get to peek behind the curtain at NetOne. There have been too many irregular dealings over the years, and we worry that should anything happen, we would be down to one mobile operator, and none of us wants that.

    The AG on NetOne

    Some question the value of the supposed insights in the Auditor General’s report. I think it would be unwise not to consider unpacking it. It might be of limited value, but there is still value in it.

    I understand the frustration too, and I’ll take this opportunity to rant a little. Here we are talking about the AG’s examination of NetOne’s financial statements when we hardly get to see those financial statements.

    In the private sector, for example, for NetOne’s competitor Econet, we get the financial statements and the auditor tells us if we can trust what we see in the statements. For NetOne, for the most part, we only get the auditor’s opinion without the financial statements in question. That is ridiculous.

    Let us go through the NetOne section in the AG’s report.

    The AG audited the financial statements of NetOne and gave a qualified opinion. This simply means the AG and the accountants under her examined the financial statements of NetOne for the year that ended in December 2022.

    The AG gave a qualified opinion, which means the financial statements are mostly fair and accurate, except for certain areas. Let’s get into those areas that the AG considered to be irregular.

    Exchange rates

    You remember how fast the ZW$ was losing value before its eventual decommissioning? Well, that presented challenges for NetOne when they were trying to prepare their financial statements.

    The financial statements were done in the local currency, but there were some transactions and balances that were in USD. The exchange rate that NetOne used to convert to the ZW$ was deemed inappropriate by the AG (they went against accounting principles).

    Note that this happened in the year ended December 2021 and not 2022. It appears the 2022 balances and transactions were converted appropriately. The 2021 problem was only brought up because of the residual effects it had on the 2022 statements and the impact it may have in comparing the 2021 and 2022 statements.

    Values of property and equipment

    Companies have to report on the property and equipment they have. We need to know how much their buildings, cars, networking equipment, etc., are worth.

    So, back in 2020, NetOne assessed the value of their property and equipment in USD, as most companies did during the hyperinflationary period we were in. Then NetOne converted those USD figures to ZW$ at the prevailing interbank rate and called it a day.

    The government insisted that the interbank rate was the official rate, which is why NetOne used it. However, the interbank rate was significantly different from the market rate, which meant that the values placed on the assets were grossly inaccurate.

    The relevant accounting standard is straightforward. It requires the method used to value property to be the same as the method most people in the market would use. The AG determined that the way NetOne valued its assets in ZW$ was not how the market would value them.

    We mentioned that this valuation happened in 2020, but the values were carried forward to the 2022 financial statements. Hence, the AG stated that this valuation was responsible for the qualified opinion.

    NetOne might not be viable

    The AG has concerns about NetOne’s ability to continue as a going concern. This means the AG is worried about the company’s ability to keep operating in the foreseeable future, or in other words, whether the company can meet its obligations and continue its operations without significant restructuring or changes.

    The AG points out that NetOne posted a loss of ZW$40 billion in 2022 and ZW$31 billion in 2021. Those figures might seem abstract, so converting them to USD helps provide context. However, as mentioned earlier, the conversion issues led to NetOne receiving a qualified opinion. To give you a clearer picture, here are the figures using both the interbank and market rates:

    • The ZW$40 billion loss in 2022 was about US$60 million using the official rate or US$40 million using the market rate.
    • The ZW$31 billion loss in 2021 was more substantial, at US$280 million using the official rate or US$160 million using the market rate.

    These are significant losses, though the 2022 losses were not as severe as those in 2021.

    The AG also noted that NetOne had more liabilities than assets. This means that if we add up everything NetOne has in money, property, equipment, etc., it is less than what NetOne owes its suppliers, lenders, employees, etc. In other words, they owe more than they have.

    Total liabilities exceeded total assets by ZW$32 billion (US$48 million or US$32 million) at the end of 2022. However, not all of what was owed was due to be paid in the following year, so to get a clearer picture, we need to compare current assets to current liabilities.

    NetOne’s short-term problem

    The AG noted that current liabilities exceeded current assets by ZW$20.9 billion (US$31 million or US$20.9 million). This is a serious issue, which is why the AG has concerns about NetOne’s ability to meet its obligations.

    If NetOne were in a better position regarding short-term obligations, you might think they could turn things around before the long-term obligations come due.

    I fear some might not fully grasp why this issue with current liabilities is significant. Here’s an analogy:

    If you owed a loan shark $1,000 that you needed to pay back in three months, you would be in a better position than someone who owed $400 that was payable in two weeks.

    NetOne has to pay the metaphorical loan shark very soon and might not have enough time to turn things around.

    That said, the AG’s report comes out quite late, and we are already in 2024. So, we know that NetOne managed to get through the whole of 2023 despite the concerning financial statements.

    More NetOne issues

    The other matters that the AG highlighted are straightforward.

    Bank reconciliations

    NetOne was not completing bank reconciliations on time. Bank reconciliation refers to comparing your records of transactions (like deposits and withdrawals) with the bank’s records to ensure they match. This process helps identify any discrepancies, such as unrecorded transactions, bank fees, or errors.

    Infrequent bank reconciliations mean that fraud and errors may go undetected. This might explain why we see headlines like these: NetOne loses about ZWL $565 million to fraud.

    NetOne says they have since sorted the bank reconciliation issue.

    Contract customer lines

    NetOne has post-paid customers who use their lines as they wish and then receive a bill at the end of the month. This is different from most of us with prepaid lines, who must purchase recharge cards before receiving service.

    NetOne’s policy is to suspend the lines of post-paid customers who fail to pay their bills after 90 days. However, NetOne was not implementing this policy, and the AG noted that this increased potential financial losses. These defaulting customers continued to receive service, worsening their debt.

    NetOne says the company transitioned to a new billing system and faced challenges during the migration, which resulted in lines not being suspended as they should have been. They claim the issue has been resolved.

    Unidentified deposits

    NetOne had a significant amount of money deposited into their bank account that was not accounted for. It had not been credited to anyone’s account and was just sitting in the bank.

    Having worked for a government organisation myself, I am familiar with this problem. For various reasons, you often find numerous deposits with no identifiable information, such as names, reasons for payment, or any other useful details.

    NetOne says they are working with banks to identify the depositors, but even then, I know they may not be able to figure out some of the deposits.

    The AG recommends implementing an integrated payment gateway system.

    That’s it

    We only get a glimpse into NetOne’s state from reports like these. Unfortunately, the little we see is almost always worrying.

    I’m curious to know how NetOne managed to address the issue of current liabilities exceeding current assets. Was the company extended loans by other state-owned enterprises? Are salaries in arrears? Were suppliers negotiated with, or did the government use its influence to force them to forgo pursuing payment?

    We have no idea and likely never will. However, we will continue to investigate as best we can. I really hope this situation is resolved because Telecel is a non-factor in the market, and if NetOne were to fail, we would be down to just one operator. That simply cannot happen.

    Also read:

  • TelOne partners OneWeb (Starlink competitor) and looks to slash fibre and ADSL prices too

    I am astounded by just how much a little competition can achieve for end-users. For years, we were told that the economic conditions in Zimbabwe were so dire that high internet access costs were inevitable.

    We begrudgingly accepted it, living in the same economy and understanding the challenges. However, when Starlink seemed poised to enter Zimbabwe, our internet access providers (IAPs) suddenly started thinking outside the box.

    Just over a month ago, Liquid, the largest IAP, partnered with OneWeb, one of Starlink’s biggest competitors in the low earth orbit satellite internet arena. We applauded the move, but Liquid wasn’t finished yet. Just over a week ago, they introduced more affordable unlimited packages.

    It’s as if we’re living in a different Zimbabwe. Where were these initiatives pre-Starlink? Never yo mind, the good news continues. TelOne, the second-largest IAP, has joined the fray.

    TelOne partners OneWeb

    Last week, TelOne CEO Lawrence Nkala said,

    Technology is here to stay and with the coming in of low-earth orbit (OBT) in the country, affordability of the internet is what we will want to look at.

    We will partner with low-earth orbit satellite providers and TelOne this week concluded a partnership with a low-earth orbit satellite provider. We will see to it that the launch of our services will be in Q3/Q4 2024. We have partnered with Eutelsat OneWeb and the deal is basically that we will be reselling their services and we will be doing the deliveries.

    OneWeb partners with businesses, allowing them to resell or distribute their products, unlike Starlink, which mostly goes it alone when possible. This partnership model is why both TelOne and Liquid chose OneWeb.

    To understand what the deal means for TelOne, you can read this article about the similar partnership between Liquid and OneWeb: Liquid partners with Eutelsat to take on Starlink in the satellite internet race, let’s talk about it. The implications are the same for TelOne.

    I believe TelOne will likely sign a distribution partner agreement similar to the one between Liquid and OneWeb. You might find OneWeb’s pitch to potential partners interesting, as it highlights the benefits that attracted both TelOne and Liquid.

    Do you have a vision for how Eutelsat OneWeb connectivity can power your network solution? Do you have a customer base ready for low-latency, high-speed connectivity? Can you ramp up your business using APIs, automation, and self-service tools? Can you manage logistics and supply chain, and serve customers end to end? Is it time to enhance or scale connectivity for your enterprise, community, government, maritime, or aviation business?

    If your answer is yes, then Eutelsat OneWeb would like to hear from you. Our channel partner program offers strength in partnership, to serve enterprise-grade broadband that you can flex to your customers’ needs, when, where, and how you want it.

    As you can see, OneWeb is flexible and we may yet see our 2 IAPs integrate differently. TelOne isn’t sure just how the partnership will work out. Said Nkala,

    No commercial terms have been concluded yet. We have just concluded that TelOne will be their partners in distributing their services.

    Slashing prices

    Just like Liquid, TelOne realised that simply partnering with OneWeb to distribute their services wouldn’t be enough. They cannot neglect their terrestrial (land-based) infrastructure and become overly reliant on OneWeb.

    So, it follows that they have to reduce the prices of their fibre and ADSL packages, as Liquid did.

    Remember how, for the longest time, internet providers in the country were putting on a brave face and downplaying the impact of Starlink’s potential arrival? It’s refreshing to see TelOne’s CEO being candid about the situation. Nkala stated,

    We will introduce flexible pricing models to remain competitive. If we need to give discounts on certain products, we will do so, so that we remain in the game.

    At the end of the day, we cannot offer prices that are below our costs, so where we do have flesh to cut in terms of pricing, then so be it.  Our goal is to attract and retain customers with competitive pricing.

    TelOne is well aware that the company stands at a crossroads and are facing an existential threat. They understand that if they don’t play their cards right, they could be forced out of the game. Nobody wants that.

    All is well…

    It appears we can look forward to lower prices all around – the very thing we’ve been crying out for all these years.

    So, what happened to the supposedly insurmountable economic challenges? Last I checked, Zimbabwe is still landlocked, and Mthuli has not tweaked his exorbitant taxes. So, how are these price cuts possible?

    That’s all in the past, though. I know some of you have vowed never to use Liquid or TelOne services again if you can avoid it due to the ‘years of extortion.’ That’s a bit foolish.

    We are about to have multiple decent options, and you’re going to swear off some of them? Don’t be silly, just choose the one that offers the best value for you. Forget the past.

    Sure, it might leave a bad taste in your mouth working with your former ‘abusers,’ but if we, as a country, can work with our former colonisers, you too can work with our IAPs.

    So, my dear friends, as we said before, we all stand to benefit from Starlink’s potential arrival, whether we use their services or not. The developments mentioned above are a testament to that.

    Remember, though, that the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) is set to license even more players. These new entrants don’t need as much capital to set up as before, as they can partner with companies like OneWeb and achieve 100% coverage of Zimbabwe instantly.

    We’ll see what these other players bring to the table, but it can only mean good things for us as consumers.

    Also read:

  • Dolphin Telecom says they can cut your data usage by 60% and save you money

    You may remember Dolphin Telecom, we talked about them when they were close to launching as an MVNO. That was back in 2022 and the company has evolved since we first talked about it.

    Just so we are on the same page:

    An MVNO, or Mobile Virtual Network Operator, is a company that provides mobile phone services without owning the wireless network infrastructure. Instead, it buys network access at wholesale prices from larger carriers like Econet or NetOne and then sells mobile plans to customers under its own brand. This allows MVNOs to offer competitive pricing and unique plans while relying on the established networks for coverage and quality.

    Dolphin Telecom is more than just an MVNO and today we talk about some of their work as an internet aggregator and managed service provider (MSP). This simply means they combine multiple internet services from different providers into one platform, offering a single bill and centralised control.

    Internet aggregation

    As an internet aggregator, Dolphin collects internet services from various providers into one platform, simplifying management for users. An internet aggregator could combine the services of mobile operators like Econet with the fixed service of TelOne for example.

    As Zimbabweans, we don’t need telling how unreliable ISPs can be and many of us have multiple lines and services just so we have a backup. This illustrates just how valuable an internet aggregator would be.

    Managed Services

    Here, Dolphin remotely monitors and manages the IT infrastructure and end-user systems of other businesses.

    This involves stuff like network monitoring and maintenance to help desk support and cybersecurity. MSPs offer a cost-effective and efficient way for businesses, particularly small and medium-sized ones, to access expert IT services without the need for an in-house IT team.

    Optimised internet performance

    Dolphin utilises smart routers to optimise internet performance for customers. In simple terms, they help prioritise important business traffic during work hours and reduce unnecessary data usage, making internet connections more efficient and cost-effective.

    The smart routers they use have SD-WAN, which we have talked about before. For the benefit of those who don’t know,

    SD-WAN (Software-Defined Wide Area Network) is like a smart traffic manager for a company’s internet. It helps you use different types of internet connections (like cable, fibre, or cellular) to send information between offices or to the cloud. This helps prioritise important activities, such as business tasks, during busy times, ensuring they get the best possible performance. SD-WAN also reduces the need for expensive hardware, lowers internet costs, and makes networks more secure and reliable.

    Why you should care

    As you might have been able to tell, there are some benefits to what Dolphin is doing that only accrue to businesses. However, there’s stuff that individuals could use.

    For individuals

    Dolphin says home users can expect data savings of up to 60%. Which should lead to real dollars saved. It appears Dolphin is confident in their internet performance optimisation.

    They say you can enjoy services like Netflix with optimised quality without using excessive data. I know most of us are on capped packages and would greatly benefit from this reduced data usage.

    For businesses

    They can expect to save money too. Dolphin promises lower priced packages with reduced costs and waste. Again, they say savings of up to 60% when it comes to data usage are to be expected.

    Then there is the whole prioritisation of business traffic during working hours advantage.

    I think we all know that in the real world, some people will be streaming YouTube tutorials in 4K, right as some are trying to hold a video call. While the tutorials could be critical for that employee’s job, they still could affect other business operations.

    The other benefits to talk about are those that are accrue to smaller businesses that cannot afford to have in-house IT departments i.e. better security, enhanced troubleshooting and support etc.

    Good to see

    The above sounds all rosy, however, we have to see what actually obtains on the ground. That 60% reduction in data usage would be great if it actually happened. There’s no reason to be sceptical of the claim but there is equally no reason to run with it as gospel.

    The solution is to try it out and see just how good it is. Dolphin seems confident you will stay. With those savings I would stay, no doubt about that.

    I think it’s small businesses that have the most to consider here. Here’s Dolphin’s pitch in summary:

    I can’t tell you if this is the way to go but I sure am glad you have the option to get managed services now.

    Which is my overall sentiment, I am glad Dolphin got the licence to operate in Zimbabwe. I wasn’t particularly aware of any internet aggregators in the market and I think there is value there. So, let’s hope Dolphin succeeds because their success means businesses and individuals saving a little money on their internet bills, at the very least.

    If the above sounds good to you, find out more about these services on their website here, or WhatsApp +263717848204 or call +2638677210754

    Also read:

  • Liquid introduces exciting new unlimited packages at impressive speeds

    They say competition benefits users and I think we can add that even the threat of competition has the same effect. That’s what most people think is the reason why Liquid (formerly Zol) has exciting new unlimited packages we will be talking about.

    We got to ask Liquid what motivated the new packages and they say it had nothing to do with that other company that I shall not name. It was simply their own marketing initiative.

    Listen, in all likelihood, that other company is responsible. However, that does not matter one bit, who cares if that’s the case. What we have here are exciting new products and I for one will not be looking this horse in the mouth.

    Infinity packages

    All the packages we are talking about today offer unlimited data. I guess it’s more technical to say they are uncapped. They look like this:

    Home:

    • Infinity 99 – costs $99 a month at up to 75Mbps
    • Infinity 129 – costs $129 a month at up to 100Mbps
    • Infinity 169 – costs $169 a month at up to 150Mbps
    • Infinity 89 – costs $89 a month at up to 20Mbps ( This one is the sole new Wibronix package, and so if you’re on fibre it’s not available to you. The 3 above are Fibronix only)

    This is more like it. Look at those speeds. I know some might wonder about how real those speeds are. Well, right now I’m on a 50Mbps package and that’s mostly what I get when there are no fibre cuts anywhere. I did test what kind of speeds Liquid themselves enjoy at their HQ and … yeah.

    Mine has 47.4 down, 47.3 up and Liquid’s has 237 down, 295 up.

    On prices, would I have wanted to see a $50 option? Of course. I would have loved it to be free but I think the above packages are a good step in the right direction. I think in time prices will only go down further.

    That has been the trend in most developing countries and GMSA says that has been down to regulatory reforms, increased competition, and infrastructural investments. In Zimbabwe and a few other countries we were not really seeing this but we seem to have turned a corner.

    Until we get there, my only hope is that Liquid brings the $89/20Mbps deal to Fibronix users too. Or if you’ll allow me to daydream here, how about a $50/10Mbps one too?

    Business:

    • Biz Infinity 99 – costs $99 a month at up to 25Mbps
    • Biz Infinity 149 – costs $149 a month at up to 50Mbps
    • Biz Infinity 275 – costs $275 a month at up to 75Mbps
    • Biz Infinity 569 – costs $569 a month at up to 100Mbps
    • Biz Infinity 99 – costs $99 a month at up to 20Mbps ( This one is the sole new Wibronix package. The 4 above are Fibronix only)

    Good to see

    It’s not everyday that you see price cuts and so I’m one happy camper. Do I think there’s room for prices to tumble even further? – yes, of course. However, this is a positive thing that should be celebrated.

    Do note that the packages are promotional, which means this is not really the new Liquid pricing but rather we will revert to old prices when the promotion ends.

    Liquid did say this promotion will be run indefinitely and so there’s that. That essentially means it’s as good as a price cut. We can treat it as such.

    However, it’s a good business move in that it allows Liquid to tweak things later without much fuss. Should it happen that capacity is a problem or that hypothetically speaking, a certain competitor never materialises, the promotion can be scrapped. It’s a good business move setting it up this way.

    What of the competition?

    Liquid is not the only game in town and I know you guys have spreadsheets comparing various packages from different service providers. That is the lucky few that have multiple providers to choose from, I know many locations have just one option.

    For those that were (are?) looking at that other yet-to-come competitor, how would you compare what they have to offer with what Liquid has here? Seeing as Liquid equipment is much cheaper, the subscriptions have gone down and all things being equal, fibre should be more reliable, does this change things for you?

    Oh, and I found out some were wondering why we act as if Liquid does not have competition right now when we talk about that other looming competitor. That’s actually a compliment to Liquid.

    We have found that most people who have access to multiple service providers prefer Liquid (especially Fibronix), the only real complaint being the cost, although service interruptions have been a problem in the last couple of years.

    Also read:

  • Govt to expedite Starlink licensing after SpaceX moves launch date to 2025

    To say the Starlink licensing saga is unconventional is tatamount to saying water might be wet. Listen, I’m not compalining, but it has to be acknowledged: it’s one weird story. We have a few updates.

    The Minister of ICT, Tatenda Mavetera told the Sunday News,

    We are currently working on technical modalities like interoperability between Starlink and other network service providers. We want to make sure that there is no interference with the existing network service providers. We have set a target of two weeks and in the next two weeks, we expect to have completed the technical modalities. The Postal and Telecommunication Regulatory Authority has set the third quarter of the year as the time frame to fully roll out but we are saying as a Government we need to expedite the processes

    Again, I’m not complaining but it is a little unusual to hear a government say it is looking to expedite the licensing of an operator. I get it though, we have been among the Starlink evangelists and understand the benefits the country could obtain from Starlink’s arrival.

    The Minister does go on to talk about some of those things. Those are the conversations we had all of last year. We shan’t get into them but let us unpack her statement above.

    Technical modalities

    She’s talking about what goes into the licensing of a company that provides internet access. She gave examples of interoperabilities and the intereference issue. Let’s get into that and the other modalities that go into this. I know some are wondering why it takes so long. (Not agreeing that it should take long though, for any operator, not just Starlink.)

    Interoperability and Network Integration

    We have to ensure seamless interoperability between Starlink’s network and existing network service providers. This involves technical coordination to prevent interference and establish protocols for data exchange and routing (finding the best paths to deliver data efficiently.)

    Or in simple English, we need to align Starlink’s technology with existing service providers’ stuff. It involves managing frequency allocations to avoid interference with other services.

    Frequency allocation

    The government needs to allocate specific radio frequencies for Starlink’s operation and issue the necessary licenses. This involves coordination with international bodies to avoid interference with other satellite systems or terrestrial networks.

    Ground station infrastructure

    Some of the experts we have talked to see this being a huge issue. Zimbabwe’s current laws require that any company offering the services that Starlink wants to offer needs ground stations in the country.

    The problem is, Starlink does not have ground stations in every country it operates in. It gets around this by linking satellites using lasers, which sounds like sci-fi.

    You see, back when state media was yet to get on the Starlink bandwagon, they used that fact to bash the service. Here’s a quote from The Herald from back in February,

    Starlink also uses optical space lasers to transmit data without local ground stations, which could pose a threat to other satellites and potentially weaponise space. For example, China and Russia have expressed concerns that the US could use its satellites to launch attacks on their space assets, or to disrupt their military and civilian operations.

    It remains the case and if I were a betting man, I’d wager that of the locations Starlink would have picked out to set up ground stations, Zimbabwe was not one of them.

    So, the expediting process the Minister talked about might involve getting some executive authorisations for Starlink to operate without having to set up ground stations.

    Regulatory compliance

    As much as we all want to see Starlink and its competitors operate in Zimbabwe, we cannot just throw the rulebooks out and roll out the red carpet. There has to be some semblance of the rule of law being applied, lest we lose our ‘prime investment destination’ status.

    So we need to ensure Starlink complies with local regulations and obtains necessary approvals from government bodies. Issues like consumer protection, fair competition, and data privacy have to be ironed out.

    More technical stuff

    We won’t get it all but it includes:

    • Network Testing: Conducting extensive testing to ensure reliability and performance.
    • User Terminal Deployment: Ensuring the availability of user terminals (satellite dishes) , along with clear installation guidelines and support for users.
    • Technical Support and Maintenance: Establishing a technical support system to address any issues that may arise. This includes having trained personnel, spare parts, and maintenance protocols.

    Expediting the process

    The Minister says they want to get the above sorted out in 2 weeks. The regulator in charge of this, Potraz, had a broad Q3 deadline but the government says we should set it all up in 2 weeks.

    Knowing our government, it will be done. Say what you want about them, but when they want something done, it gets done, otherwise heads will roll over at Potraz. Not literally, although I wouldn’t rule that out if my life depended on it.

    We should note that this doesn’t mean we will be getting Starlink in 2 weeks. It only means we want the ball to be in Starlink’s court in 2 weeks’ time. SpaceX did say they were targeting a Q3 launch. However, there is some bad news on that front.

    The Starlink website now says they expect to start servicing Zimbabwe in 2025. For the past few months, it had indicated Q3 2024, yet now that the licensing process has begun in Zimbabwe, they have pushed the start date back.

    Here is what I think happened: as Starlink dealt with Potraz, after the President approved their licensing, they realised there were numerous issues that needed to be resolved with the stringent Zimbabwean authorities. Hence why the timeline was moved up.

    I believe the statement by the Minister is meant to let Potraz know that these are perilous times and some creativity is needed in ensuring the licensing goes ahead as was previously scheduled. What does creativity look like? Who can say?

    Try not to think about it too much

    I did say this was an unconventional licensing. Some of us are trying to not look too closely at the specifics. ‘Just get the first low earth orbit satellite internet provider in and we’ll deal with how we got it later,’ goes the thinking.

    I’m not here to say we should celebrate or shun this, to each their own. It is an unusual situation though, and that cannot be denied.

    Will the expedition produce the required result and bag us Starlink in Q3 2024? We shall see but when there is this much political support, I don’t foresee any untenable challenges ahead.

    Also read:

  • Telecel with some positives to report but overall picture grimmer than ever before

    It is that time again, we get to look at the third mobile network operator – Telecel. We know the operator has been struggling for years as evidenced by these headlines from last year;

    However, there is a new ICT sector report out, we might find that they turned a corner. We hope that’s the case, we need them to compete.

    Telecel gains subscribers

    What’s this? There are positives to report. Good going Telecel. They only say the customer is king/queen because without customers, there is no business. It is good to see that Telecel managed to reverse the trend and stop customers leaving. In fact in Q1 2024, they managed to add new customers.

    Telecel saw a 1.73% increase in active subscribers, going from 281,332 in Q4 2023 to 286,213 in Q1 2024.

    This was coupled with Econet losing a miniscule 0.04% of subscribers and NetOne losing a concerning 5.52%. Which meant Telecel saw its share of active subscribers rise from 1.88% to 1.94%.

    Let us be clear, Telecel languishing with 1.94% marketshare is a terrible thing. However, while the jump from 1.88 to 1.94% is hardly a champaigne-popping achievement, it’s a good sign. Telecel managed to convince 4881 new people to acquire and use Telecel lines.

    Unfortunately, it’s not all good news. When we then get to those subscribers’ usage stats, Telecel is still struggling to get people to recharge and use their lines. However, data usage stats are encouraging.

    Telecel subscribers’ usage stats

    Voice traffic

    Let’s start with voice traffic. As you know, you have to pay to be able to make a call and that represents money (revenue) coming in for the mobile network operators.

    Total voice traffic (i.e. for Econet, NetOne and Telecel combined) declined by 1.27% in Q1. We know that services like WhatsApp allow subscribers to communicate more cheaply, leading to a decrease in traditional phone calls.

    We expect that to happen even more into the future. So, voice traffic is a shrinking pie but it’s still an important one. So, are Telecel’s subscribers making calls? Not as much as they should, unfortunately.

    Telecel market share of voice traffic declined to a ridiculously low 0.13% from a similarly bleak 0.6% in Q4 2023. That is a 78% decline in voice traffic market share. However you look at it, 0.13% market share is concerning.

    Remember too that Telecel has 1.94% of the active subscribers, which was an improvement from the previous quarter. Meaning Telecel gained subscribers whilst the other 2 lost them and yet Telecel saw its share of voice traffic decline.

    Data traffic

    As people move away from traditional calls, they need data to be able to use over-the-top services like WhatsApp. Hence why we have seen an increase in data usage accompany a decrease in voice traffic.

    The data traffic pie is growing and is set to keep growing and so if Telecel manages to get a bigger piece of this pie, then that could offset the massacre they are being handed in the voice traffic fight.

    What do you know, that’s what we see.

    Telecel registered a 24.77% increase in mobile internet and data traffic. An impressive feat considering that Econet only registered an 11.78% increase.

    It looks good if painted that way, however, that’s not the full picture. Telecel controls so little of the pie that even with that increase, their numbers are insignificant in the grand scheme of things.

    The above shows that Telecel has 0.35% of the data traffic market share. All from 1.94% of the active subscribers.

    This is better than the 0.13% market share they have in voice traffic and it’s also encouraging to see that usage increased significantly which led to Telecel maintaining 0.35% share from Q3 2023.

    Implications for revenue

    Unfortunately, the Potraz report does not tell us what Telecel’s share of revenues and costs is anymore. That’s the one gripe I have with the report.

    That may be but we can make some speculations based on the data we do have.

    We know that Telecel has 0.13% of voice and 0.35% of data market share. We don’t know what their share of SMS, VAS and other revenue streams is.

    However, we know that voice and data make for almost all of MNOs’ revenue and that data revenue and voice revenue are almost equal. So, assuming Telecel has similar market share on those other revenue streams, which are not that significant, we can make some rough assumptions.

    Total mobile network revenues were about ZW$2.27 trillion, which was approximately ZiG 910.46 million (or about US$67.5 million). Costs were approximately ZiG 807.37 million (US$59.9 million).

    Let’s assume Telecel got a share of the revenue and costs proportional to their market share. That would mean

    • Telecel made (67.5m*half*0.13%)+(67.5m*half*0.35%) = US$162,000.
    • Operating costs were (59.9m*half*0.13%)+(59.9m*half*0.35%) = US$143,760.
    • Which leaves profits of US$18,240

    Remember that the costs mentioned above were just operating costs, which excluded all non-operating costs. In Econet’s annual report we found that operating costs were slightly less than non-operating costs. So, we can assume it’s worse for Telecel. However let’s just assume non-operating costs were equal to operating costs.

    That would leave Telecel with a loss of $18,240-$143,760 = $125,520. It’s a rough calculation that’s likely better than the actual loss.

    The only silver lining I see is that the whole sector is struggling and Econet made a huge loss in the year ended February 2024. So, Telecel has a valid excuse, it’s not just them.

    What’s sad about that is that the actual situation is much worse. History tells us that Econet pulls in more revenue per user and that Telecel does not pull in revenue proportional to their market share. Telecel has had to run more promotions to entice users and so they make less per minute or MB used than does Econet or even NetOne.

    Telecel lives on

    At this point, Telcel is like that person who has been on life support for 5 years. You start to wonder why we are putting this thing through this pain when it doesn’t look like there is a light at the end of the tunnel.

    That said, I would love to be wrong about this. I would love to see Telecel rise from the ashes but that won’t happen until shareholder squabbles are squashed and multimillions are poured into the company.

    Also read:

  • Your wishes are coming true, Potraz to license multiple operators to compete with Econet, TelOne etc

    We are past debating the benefits of making information and communication more affordable and accessible for the economy. No one is arguing the contrary anymore, not in words, but our actions and policies tell a different story.

    For a long time Zimbabweans, weary under the exorbitant internet access charges prevailing in the country cried out for the powers that be to license new players. The reasoning being that the current players were robbing us blind.

    This thinking usually neglects to consider whether we actually have suitors. Zimbabwe is not the easiest economy to operate in, which is the understatement of the year. So, it might just be that we were getting what we were getting because it was what the economy could allow for.

    Except we know that’s not the case. Let me jog your memory with this quote from then ICT Minister Supa Mandiwanzira. He let the cat out the bag back in 2016,

    If government did not want EcoCash or Econet to be the largest we would have opened our gates for Safaricom to come and operate M-Pesa in this market. We could have allowed MTN to set up in this market and offer the services that Econet offers. And I can assure you they come with a huge pocket to dwarf any player in this market and they have been knocking on our doors. But we have kept them closed because we want to protect them [Econet].

    You can read the original article here to get the context of his remarks.

    Now, we always have to take statements made by politicians with a little scepticism. However, in that statement the government essentially told us that they indeed blocked foreign players from coming into the market. Whether that was to protect Econet is more debatable. I would argue it was to protect the parastatals that compete in the space.

    So, if you ever felt Econet or EcoCash were predatory, you had the government to thank for that. To be fair, there are a lot of legitimate reasons why the government would want to protect our own companies. We all agree with some protectionist stances to some degree.

    However, the government seems to have changed course. They are no longer willing to protect Econet or any other local company anymore.

    The licensing of multiple players

    In the Postal and Telecomminications Regulatory Authority of Zimbabwe’s Q1 report, the Director General says,

    On a more positive note, the prospects for effective competition are gaining traction as evidenced by the number of licence applications received for various licences under the converged licensing regime. Accordingly, we envisage a significant increase in the number of operators, which is set to enhance competition in the sector, spurred by a high appetite for innovative digital services. Indeed, the sector is set for increased investment, competition, and innovation, …

    The converged licensing regime he is talking about introduced a new licensing model where operators can offer a variety of services under a single license, rather than obtaining separate licenses for each service. This makes it easier for new players to enter the market because the cost of obtaining multiple licences was just too high.

    Fun fact – this converged licensing thing kicked off in 2016, around the same time the then ICT minister was telling Econet that they had protected them in the past. That seems to be borne out on this evidence. When Econet, rightly in most people’s opinion, complained about being forced to share infrastructure, that very year the converged licence became a thing.

    A number of applicants took advantage of this and the likes of Dolphin Telecom (who we’ll be talking about soon) got their start.

    The question then becomes, ‘If the converged licence is not a new thing, how come Potraz says this time around they envisage a significant increase in the number of operators?’

    Why now?

    We won’t know exactly why now but there are a few factors that jump out. The first is just to acknowledge that although its still Zanu PF in charge, we have different personnel in charge from the highest office to the ICT Minister’s desk. I know it’s mostly the same personnel, just shuffled around, but you get the point.

    You can debate how genuine or effective it is, but the ‘Zimbabwe is open for business’ mantra is something that exists now. We know that on the ground, the door is not as open as it should be but a crack is better than nothing.

    So, this means we can conclude that the government is no longer actively protecting Econet (again, he probably meant NetOne and Telecel) by blocking foreign or domestic players from entering the arena.

    So that’s one side of the puzzle answered for – the government is no longer as protectionist as it was.

    Something we will have to consider in a different article is what this means about the government’s thoughts on NetOne and Telecel ever being up to the task. This seems like a quiet admission that Econet needs proper competition and it’s going to have to come from elsewhere.

    However, that doesn’t answer why now in 2024 and not before. We don’t know why Potraz is more likely to license operators now.

    However, it just might be that there are more applications now. Potraz did say “the prospects for effective competition are gaining traction as evidenced by the number of licence applications received for various licences under the converged licensing regime.”

    Why are operators applying now?

    We will have to talk to these applicants to know why. Is it that the country’s economic outlook is that bright? Is it that the word finally got out that converged licences are a thing now?

    What we know for certain is that there is huge growth potential in digital services. Zimbabwe is still analog to a high degree and there is appetite for digitalisation in the market. We saw how the ICT sector saw this much growth in Q1 2024, mostly driven by internet usage growth:

    • Mobile Network Operators – 65.6%
    • Internet Access Providers – 63.43%

    So, who wouldn’t want a piece of that action? It could be that certain factors are just aligning at this point in Zimbabwe for many to take a crack at it. Public awareness, ability to afford and use and strong demand may have attracted many applicants.

    Or it could just be that there are new and exciting technologies that allow applicants to enter the space with lower capital. We have talked a lot about Starlink and the low-earth orbit satellite technology which did not exist back when the government was protecting Econet.

    Whatever the case, we are excited to see what the new applicants will bring to the table. The sector has sorely needed competition and it looks like we are about to get it.

    Also read:

  • The ICT sector is posting losses as costs outpace revenue, something has to give

    As we know, you don’t want to get caught by a dying horse’s kick. Yet, we all were brutalised by the last kick of the ZWL currency in Q1 2024. The telecoms sector was not spared from this and now that the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has released the Q1 report, we can see just how that all transpired.

    There is a lot we can glean from the report but one of the major highlights is just how challenging the Zim economy is to operate in. We have self inflicted policy stuff and climate problems only exercebate the challenges.

    Rising revenues

    The sector saw the following growth figures:

    • Mobile network operators (Econet, NetOne and Telecel) saw their revenues rise by 65.6%,
    • IAPs (Liquid, TelOne, etc) by 63.43%,
    • Postal and courier services by 62.51% in real terms

    Seeing this, you would think it was a solid quarter but you’d be half right.

    Do note that the above growth figures are adjusted for inflation and so are not inflated by the massive depreciation the ZWL faced in Q1. In any world, in any economy, the growth figures above are impressive.

    For MNOs and IAPs, this growth was mainly driven by growth in data and internet usage. Zimbabwe still has aways to go in the internet usage game even though we have had steady growth for years.

    In Q1, mobile internet/ data usage increased by an impressive 24.9%.

    There is room for even more growth because the country still has an internet penetration rate of just 75.3%. Which is not as impressive when you factor in multiple device ownership in certain demographics.

    So, conservatively, there is at least a third of the country yet to be served. Of those with internet access, their usage is capped by their financial challenges. Should internet access trend cheaper and economic challenges begin to reverse, usage would spike.

    Anyway, there is room for growth and it appears the sector managed to capture it in Q1 2024. The problem comes when you consider how much it cost to get that growth.

    Faster-rising costs

    Here’s how much operating costs rose by in real terms:

    • MNOs – 140.97% (compared to 65.6% revenue growth)
    • IAPs – 78.94% (compared to 63.43% revenue growth)
    • Postal and courier – 127.55% (compared to 62.51% revenue growth)

    You don’t need to be an accountant to know that when costs outpace revenue like this, you have a problem. The problem is that this has been the case for years. Operating costs have been outpacing revenues and we have had the challenging economic conditions to thank for that.

    This is a huge problem because this cannot continue on indefinitely as there will be serious financial sustainability questions that would be raised.

    We have to remember that this is a capital intensive sector and prolonged periods of low profits affect investment into infrastructure, which impacts the quality of service and capacity to serve the underserved. Which in turn will affect revenues. It can become a spiral to the bottom.

    Some have argued that the rising operating costs are due to poor cost management and operational efficiency. It’s not entirely out of the question but I would argue it’s not the main cause.

    In Q1 we were in a transitionary period as we prepared to say goodbye to the ZWL and welcome the ZiG. That only served to muddy the waters. Otherwise we are familiar with some of the reasons for the crazy operating costs:

    inflation, currency depreciation, power supply issues, infrastructure maintenance, regulatory compliance and customer service demands.

    If the ZiG manages to hold on to its value better than the ZWL did, the sector might be looking at improvements going forward.

    However, as Potraz notes, there are some serious challenges that are likely going to weigh down on whatever positives a more stable currency would give.

    Upcoming challenges

    We are still feeling the effects of El Nino. Here’s how the drought it caused will affect operators:

    • Demand-Side Impact:
      • Expected to reduce aggregate demand as consumers prioritise essential expenditures like food over telecommunications services.
      • Lower disposable incomes, especially in agro-based sectors, may lead to a contraction in demand for data services and discretionary ICT applications.
    • Supply-Side Impact:
      • Potential power generation issues due to low water levels at Kariba Dam could increase operational costs and impact service quality.
      • Increased reliance on alternative power sources could further strain financial resources.

    So, although ZiG is more stable than the ZWL was in its last quarter in action, these challenges may delay the benefits of the improved macroeconomic conditions.

    Profits

    Back to Q1 performance, we saw how operating costs grew faster than revenues. How were sector profits though? We do not have the full picture as we only have operating costs, which don’t include stuff like depreciation, taxes, interest expenses, and other non-operating expenses.

    However, we can still get a basic picture of what it looks like.

    Mobile operators recorded revenues of approximately ZiG 910.46 million against ZiG807.6 million in operating costs. This makes for profits of ZiG102.86 million (about $US7.6 million).

    When you consider the boatload of expenses still to be deducted from that basic profit, you can clearly see that operators did not have the best of quarters.

    See, we find that for Econet, in their annual report, direct network and operating costs plus staff costs were less than depreciation and exchange losses. Non-operating costs as a whole slightly beat out operating costs.

    So, if we conservatively estimated non-operating costs to be equal to operating costs, we would see that the mobile network operators posted losses in Q1. Econet did post massive losses in their year ended February 2024 and I think we can conclude that the other 2 fared even worse.

    For IAPs, revenues reached approximately ZiG 451 million whilst operating costs reached approximately ZiG371.4 million, making for profits of ZiG79.6 million (US$5.9 million). Again, after factoring in non-operating costs those profits would be much lower.

    The situation is downright depressing when it comes to postal and courier services. Revenues reached approximately ZiG30.3 million whilst operating costs reached a crazy ZiG46.9 million. Which means a loss of ZiG16.6 million (US$1.2 million) before we get to non-operating costs.

    Operating costs have been higher than revenues in this subsector for 4 quarters in a row.

    Not the prettiest picture

    Zimbabwe as a whole is struggling and so you would expect to see most sectors struggling too. So, the above is not a surprise. We shall see if the more stable ZiG will help the sector recover.

    The saving grace for the sector is the opportunity for growth. In the relative short term, the drought may impact demand for internet services but in the long term, there is massive potential for growth and whichever companies have the infrastructure to serve the nation stand to reap the benefits.

    There is that whole disruptive satellite technology about to swing in like a wrecking ball and so not all will capture the growth we talked about.

    Whatever the case, it’s going to be interesting.

    Also read:

  • HPE Aruba and Solution Centre aggressively coming for Cisco’s networking throne

    We attended an event where HPE Aruba showcased their Aruba networking solutions. In attendance were all manner of folks from all types of organisations.

    Those in the networking space already know about HPE Aruba but for those not in the know, they provide networking solutions for businesses. And, yes, it’s owned by HP (the PC maker).

    You can read more about them here

    They compete with the likes of Cisco, TP-Link, Huawei, Fortinet etc. 

    So they make and manage products like Wi-Fi routers, switches, and network security systems for businesses and organisations. Do note they have solutions for enterprises and smaller businesses. 

    They showcased their tech and went into why they are superior to the competition, as you would expect. Not being too well-versed with their world, I couldn’t tell you if they indeed are superior but it did sound impressive. 

    The slide below sums up what they consider to be the Aruba advantage.

    They touted their Unified SASE implementation, which in normalspeak is a cloud-based approach to network security that combines networking and security functionalities. 

    Apparently, it delivers a set of security services like secure web gateways, cloud access security brokers (CASB), firewall as a service (FWaaS), and zero-trust network access (ZTNA) all from a single cloud platform.

    On the hardware front, I was particularly impressed by one of their switches which has a switching capacity of 2.5Tbps for data transmission and a forwarding rate of 1905 Mpps for swift packet delivery. 

    The bad boy has 48x 10GB ports and 6x 40GB ports. You can connect a whole small village with that kind of hardware. 

    For small businesses

    The above mainly applies to enterprise clients. For small businesses, HPE Aruba has the Instant On range of access points and switches. They are easy to set up and manage if the demonstrations were anything to go by. I’m saying this as someone with no technical expertise. 

    Here are some key features of HPE Aruba Instant On:

    • Easy to set up and manage: The Aruba Instant On app makes it simple to configure and manage your network, even from your phone. It looked simple to me, at least. 
    • Scalable: You can easily add more access points and switches as your business grows.
    • Secure: HPE Instant On products include a variety of security features to help protect your network.

    There’s more that I didn’t get into, so if any of this sounds interesting to you, do your research on HPE Aruba.

    At the event, I talked to a few people who were excited about what they heard. Some guys with VoIP solutions thought the network management tools HPE Aruba offers would save them time and money in trying to troubleshoot when there are problems.

    Some guys representing schools also echoed the same, praising the remote monitoring and management features. So I guess, that could mean easy management could be a key selling point.

    All I know is that whether you’re a small business or a large enterprise, HPE Aruba is looking to steal you from your current provider. The competition is good, so do your research.

    Also read:

  • Safeguarding data privacy: Top 10 tips for organisations in Zimbabwe

    We’ve all seen the warnings about encrypting sensitive files and being aware of phishing attempts that aim to steal our personal information. But there’s more to data privacy than meets the eye. 

    Data privacy breaches can have a significant impact on individuals and corporations alike in terms of reputational and financial repercussions. Online financial services are used more widely in Africa than anywhere else in the world. As Zimbabwe moves more towards being a cashless society, the finance sector is facing an increasing amount of cybercrime, including phishing and bank card cloning – both of which are on the rise.  

    Such breaches are not unique to Zimbabwe. For example, several Kenyan financial institutions have lost millions of dollars to cybercrime over the past few years, while a leading bank in Rwanda lost $10.3 million to fraudulent customer withdrawals in under three months.

    It’s a critical concern for individuals and businesses globally, and more so for those operating in Africa, where the digital economy is growing by leaps and bounds. 

    In an effort to counteract these risks and safeguard the data of its citizens and businesses, Zimbabwe formally enacted the Data Protection Act [Chapter 11:24] on December 3, 2021. While the Act deals with aspects of cybersecurity and cybercrime, its primary focus is on data privacy and ensuring data protection for all data collected within the country, as well as outside the country and processed in Zimbabwe. It also includes some of the strictest penalties for non-compliance and breaches for data handlers. 

    1. Foster a top-down approach.

    Ensure active involvement and support from senior management in data protection efforts. For instance, a multinational corporation might require all its senior executives to undergo annual data protection training that is filtered down to staff and allocate a portion of their budget to cybersecurity initiatives. 

    2. Designate a Data Protection Officer to oversee data protection efforts. 

    This senior-level person should have expertise in data protection laws and regulations and oversee compliance within the organisation. This role is crucial in ensuring that data privacy is prioritised and implemented effectively. For example, a healthcare company might recruit a seasoned legal professional with expertise in healthcare data privacy laws, responsible for ensuring compliance with regulations and conducting regular data privacy audits.

    3. Provide regular training to employees on data protection best practices. 

    Ongoing training helps create a culture of data privacy within the organisation. An e-commerce company might implement a quarterly training programme covering topics such as recognising phishing attacks and secure handling of customer data. Employees also need to be aware of the risks involved with the use of artificial intelligence tools in terms of the information about your organisation that is (potentially) shared and (definitely) stored.  

    4. Implement a data classification system to categorise data based on its sensitivity. 

    Classify data based on its sensitivity, for instance as ‘public’, ‘internal-only’, ‘confidential’, and ‘restricted’. A financial institution, for example, might categorise its data into these levels, setting access controls accordingly. This helps control access to sensitive information and ensures that appropriate security measures are in place for each data category.

    5. Always be mindful of retaining customer trust.

    Build customer trust by being transparent about data collection and usage practices. For instance, an online retailer might prominently display its privacy policy on its website, detailing how customer data is collected, used, and protected. Clearly communicate to your customers how their information is being used and stored and implement privacy policies that outline your organisation’s commitment to data privacy.

    6. Understand the concept of data privacy and its importance.  

    Data privacy refers to the protection of personal information from unauthorised access, use, or disclosure. A tech startup might include a module on data privacy in its onboarding programme for new hires, explaining the principles of data protection and the company’s commitment to safeguarding personal information. By defining data privacy and ensuring that all stakeholders understand its importance, organisations can create a framework for protecting sensitive information. 

    7. Always ensure meticulous regulatory compliance.

    Ensure compliance with data protection laws and regulations relevant to your jurisdiction. For example, a global company operating in multiple jurisdictions might conduct regular audits to ensure compliance with GDPR and other relevant data protection regulations. Stay updated with changes in legislation and implement necessary changes to remain compliant.

    8. Implement robust cyber security measures to protect against cyber threats. 

    Protect against cyber threats by using encryption, firewalls, and anti-virus software. A bank, for example, might implement multi-factor authentication for all online transactions, encrypt sensitive data, and regularly update its firewall and antivirus software to protect against the latest threats. Organisations like Liquid Zimbabwe can assist businesses with implementing the appropriate solutions. 

    9. Have regulatory approved/recommended agreements in place for cross-border data transfer. 

    Establish required agreements, such as intergroup transfer agreements, and recommended standard contractual clauses for lawful data transfers outside your country of operation. For instance, a multinational e-commerce company uses approved agreements to securely transfer customer data between its African offices. These agreements ensure that data is transferred securely and complies with data protection regulations. 

    10. Invest in local data storage solutions.

    Local storage solutions not only ensure that local data regulatory requirements are met, but Also provide a cost-effective way to run sensitive latency business applications, with the required security features. For example, where a financial services company operates in multiple African countries, each will have its own set of data protection regulations. To comply with these regulations and ensure the security of customer data, the company invests in local data storage solutions in each country.

    By proactively addressing and managing the security of data, organisations in Zimbabwe can strengthen their data privacy practices, mitigate risks, and build trust with customers and stakeholders. 

    This article was written by Lorreta Songola, Regional Chief Commercial Officer, Central Africa Region at Liquid Intelligent Technologies.

  • Here is what’s causing the technical challenges on Econet’s network

    You’ve been asking and we now have a few answers. Econet has been facing some network challenges for a few days now.

    This was the communication a couple of days ago:

    We are facing a technical challenge, affecting recharge and some banking services. We regret the inconvenience caused and are working to restore normal service. Thank you for your continued loyalty and support.

    The problem is yet to be fully resolved, although we did see some services restored.

    You can now top up your airtime using recharge cards. Buy airtime from an Econet vendor near you. Dial *121*recharge key#.

    In this case, it did make sense to be excited about that particular service coming back because as far as we have observed, calls, SMS and the internet were working as normal for the most part.

    So, you could go the physical recharge card route, however inconvenient, and you would be able to do what you gotta do. That’s assuming what you do doesn’t depend on USSD. Yeah, that’s still to be fixed.

    So, what happened at Econet?

    So, what’s going on at Econet? We asked them and here’s what they told us. The technical challenge was caused by

    … a major data centre fault that affected a significant number of servers.

    Now, to unpack this, a data centre to Econet is a physical facility that houses critical IT infrastructure, specifically servers, storage systems, and networking equipment.

    Econet is saying a fault at their data centre affected several servers and those are high-powered computers designed for continuous operation and data processing. As a result,

    It affected ancillary services that are based on applications that run on the data centre, that do recharge channels, USSD-based VAS, USSD-based third-party services and some admin applications.

    What does that mean? Well, here are some of the roles that the data center plays for Econet:

    • Housing core network equipment – which includes Mobile Switching Centers (route calls and messages between mobile devices and Packet Core (EPC) (Manages data traffic within the mobile network). Luckily, this core network was not affected like last time because when this is down, nobody’s calling anyone or Googling anything.
    • Service Delivery and Content Hosting – here we are talking Content Delivery Networks (CDNs) which allow Econet to store (cache) frequently accessed content closer to users, reducing latency and improving content delivery speeds. And we are also talking Value-Added Services (VAS), which were affected by the data centre fault in question.

    The data centre supports Econet in delivering various value-added services like mobile banking, mobile TV, and USSD-based services. These services often require dedicated servers and storage resources. So, when some servers were knocked out, VAS services were affected.

    When will all this be fixed?

    It’s hard to say. It’s one of those ‘it will be done when it’s done’ kind of moments. However, Econet says,

    We are working to restore the rest of the services on a priority basis (in terms of customer usage).

    That sounds like a good way to go about it. Start with those services that affect the most people. Although this potentially means a problem that only requires 6 man hours could wait days to be fixed because it affects fewer people.

    The only problem is that they are still people with real needs but they get to play second fiddle because there aren’t that many of them. In fact, that all brings us to…

    Any inconvenience caused…

    We all know how that statement ends and if we’re being honest, we’re numb to it. Who really believes they sincerely regret these inconveniences? It’s not just Econet here too. I think they somewhat regret it.

    Here’s why I think that. Imagine you’re getting a haircut and Mnangagwa tip toes in, yanks the clippers from your barber and runs out with them. Your barber apologises, of course, and Mnangagwa brings them back after 30 minutes or so and the cut is completed.

    The 10th time this happens, your barber’s apology won’t be sincere. He’s probably thinking ‘You know that I’m dealing with a sitting president confiscating my clippers knowing there’s little I can do about it.’

    Econet and other businesses in Zimbabwe feel like the economy has done them dirty, which it has, and so we should be sympathetic to their struggles. The economy keeps yanking their clippers after all.

    That’s all understandable, however, when you miss out on a life-changing opportunity because of a fault at a data centre you know nothing about, you don’t care who yanked what clippers.

    I have conversed with several people who have lost days’ worth of business because of this and are livid. So many businesses now depend on *XXX# for their business and having USSD-based services down for days is unacceptable to them.

    Some even believe Econet is sabotaging them by yanking their USSD whilst keeping its own up. It would make for a good story but it can’t be true because even Econet and EcoCash’s USSD services are down.

    So, we cry out, ‘Why don’t they invest in better infrastructure or improve their redundancy to avoid situations like these?’ They would probably remind us about the forex challenges, high taxes and low tariffs they are contending with, which limit their capacity to repair and maintain their equipment, let alone invest in new and better stuff.

    Then the typical Zimbo retorts, ‘Kana zvanetsa chingovharisai zvinhu zvacho (if you can’t do it properly, just shut down the business)’ to which I would reply, ‘I would rather have slow internet than no internet at all.’

    Listen, I say this as someone who hasn’t felt the brunt of this but it’s no laughing matter. We need less of these outages. Faults are faults though and they happen with no warning so, it is what it is.

    To the NetOne users out there

    Techzim is affected too and *405# is down. However, NetOne users are not limited to physical recharge cards.

    You can purchase your airtime here on the website (go to the home page and scroll below the article), via WhatsApp (+263717684274), or via our app if you have it installed.

    Also read:

    The few headlines below on recent Econet outages don’t make for inspiring reading.

  • Liquid C2 partners with Google Cloud, Anthropic to deliver advanced cloud, cybersecurity and AI capabilities

    Here’s the TL;DR:

    • Partnership: Liquid C2 is partnering with Google Cloud to improve cyber security and cloud offerings across Africa. The partnership will also see Liquid introduce Africa to Google Cloud’s AI solutions, data, collaboration and security offerings.
    • The promise of enhanced security: They say we should expect heightened security measures, access to advanced cloud technologies, and a commitment to securing digital assets.
    • Generative AI: Liquid C2 will be one of Google Cloud’s largest Managed Security Service Providers (MSSPs)* in Africa, and will also deliver Google Workspace to customers, which includes embedded generative AI tools to help employees be more productive.
    • African Growth: This collaboration aims to drive progress, foster innovation, and attract global investment in Africa by providing businesses with the latest technology advancements.
    • Anthropic Partnership: Liquid C2 is also working with Anthropic to develop AI solutions for large enterprises in Africa. Anthropic’s AI models are available in Google Cloud’s Vertex AI platform, and the partnership signifies a shared commitment to empowering businesses in Africa with state-of-the-art AI solutions.

    *MSSPs are companies that provide outsourced monitoring and management of security systems and devices for their clients. Which means monitoring client systems for suspicious activity, potential threats, and vulnerabilities. They also manage various security devices, including firewalls, intrusion detection/prevention systems, and endpoint security software. Among other things. So, essentially, Liquid leverages Google Cloud’s security solutions and delivers enhanced services to its customers.

    Here’s the news in full:

    Liquid C2 partners with Google Cloud and Anthropic to bring advanced cloud, cyber security and generative AI capabilities to Africa

    Liquid C2, a business of Cassava Technologies, a pan-African technology group, today announced collaborations with global technology leader Google Cloud and artificial intelligence (AI) company Anthropic to deliver advanced cloud, cyber security solutions, and generative AI (gen AI) capabilities to African businesses across the continent.

    Building on the November 2023 signature of a Memorandum of Understanding (MOU) for a collaboration with Google Cloud in Africa, Liquid C2 is set to improve cyber security and cloud offerings across the continent while introducing them to Google Cloud’s latest AI, data, collaboration, and security solutions. Customers of Liquid C2 can expect heightened security measures, access to advanced cloud technologies, and a commitment to securing their digital assets.

    Liquid C2 is set to be one of Google Cloud’s largest Managed Security Service Providers (MSSPs) in Africa, combining Google Cloud’s leading security solutions with Liquid C2’s expertise and vision in offering comprehensive security consulting. In addition, the collaboration enables Liquid C2 to bring the capabilities of both Google Cloud and Anthropic’s AI models to its customers via Google Cloud’s Vertex AI platform1, helping businesses develop and deploy solutions quickly within their cloud environments.

    As a strategic partner of Google Cloud’s innovative solutions in Africa, Liquid C2 will also deliver Google Workspace to customers across the continent. Designed to facilitate team connections in a cloud-native environment, Google Workspace also features embedded generative AI tools to help employees create content and achieve greater productivity and collaboration in the workplace.

    By fortifying cyber security measures and infusing gen AI capabilities, Liquid C2 envisions a future where security, collaboration, and innovation go hand-in-hand, creating a safer, more productive digital experience for all. As Africa continues to emerge as a hub for technological advancements, collaboration between leading companies like Liquid C2, Google Cloud, and Anthropic play a crucial role in driving progress, fostering innovation, and attracting global investment. 

    In a separate but related development, Liquid C2 is also working directly with Anthropic, one of the largest and fastest-growing AI companies globally, to develop AI solutions for large enterprises that want to use it to improve productivity and revenue growth. Anthropic has a strategic partnership with Google Cloud, and Claude – Anthropic’s family of foundational AI models that excel at thoughtful dialogue, content creation, complex reasoning, creativity, and coding – is available in Google Cloud’s Vertex AI.                                   

    Liquid C2’s partnership with Anthropic signifies a shared commitment to empowering businesses in Africa with state-of-the-art AI solutions. By integrating AI models and services across various industries, Liquid C2 and Anthropic aim to accelerate growth for clients, further positioning Africa as a global player in the digital landscape. The collaboration presents opportunities to apply gen AI to African businesses irrespective of the industry or organisation size. 

    Thomas Kurian, CEO of Google Cloud said, “Businesses are increasingly turning to generative AI to drive operational efficiencies, improve the customer experience, and empower their employees like never before. Building on Google’s commitment to investing $1 billion to boost Africa’s digital transformation, our collaborations with market leaders like Liquid C2 and Anthropic will help bring gen AI, security, and other cloud technologies to businesses across the continent. This partnership has the opportunity to transform how African businesses serve and engage their customers as we provide them a foundation for innovation.”

    Currently, more than 80% of the largest businesses and organisations operating in more than 31 African countries use a broad spectrum of advanced digital technologies from Liquid supplied by global vendors. Many are keenly interested in moving AI readiness. Liquid C2 will remain a multi-vendor provider, offering its customers best-in-class solutions.

    Commenting on the collaboration, Strive Masiyiwa, Co-Founder and Executive Chairman of Cassava Technologies, said, “Our collaborations with Google Cloud and Anthropic signify a significant step change in our journey as Africa’s leading cloud and cyber security provider. We recognise the importance of responsible AI in enabling access to economic opportunities and empowering individuals and businesses across the continent. Our partnerships with these two leading technology firms will help us deliver      AI-powered solutions that address the unique challenges and opportunities in      Africa’s digital transformation journey. Together, we are setting new benchmarks for these solutions that cater to the complex needs of a diverse clientele.”

    Daniela Amodei, President of Anthropic, said: “We’re excited to partner with Liquid C2 and Google Cloud, bringing frontier AI to businesses across Africa. Combining Anthropic’s safe, steerable AI with Google Cloud’s secure, scalable infrastructure means this partnership has huge potential to enable African companies to grow.”

    Also read:

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