Tinashe Murapata: Are We Going To Be Happy When Econet Becomes Another Telecel?

1 year agoSat, 04 Nov 2023 09:05:38 GMT

Tinashe Murapata: Are We Going To Be Happy When Econet Becomes Another Telecel?

Economic commentator, Tinashe Murapata, has raised concerns about Econet Zimbabwe subsidizing data for Zimbabweans, stating that it may not be sustainable in the long run. He questions how long Strive Masiyiwa, the founder of Econet, will continue this subsidy. Murapata suggests that if Econet faces challenges, it could end up like Telecel.

GOZ owns Netone, Telecel, Telone which if data was a public good for the least and most vulnerable of our society then GOZ entities should happily subsidize the citizens. After all they didn’t even pay licence fees. Why is GoZ targeting Econet? What are we missing?
The Regulator has failed. A private company like any other sector must not be subjected to price controls and abuse. The regulator has new swanky offices while the industry is slowly dying. Did they force suppliers to contract at prices sub-inflation? Why is a local investor, certainly the largest and Zimbabwe’s best entrepreneur subjected to such malice?

Econet is subsidizing data for Zimbabweans. For how long can they do that? Strive Masiyiwa is now a billionaire in spite of Zimbabwe. How long will his patience last? Are we going to be happy when Econet becomes another Telecel?

Telecel Zimbabwe, a mobile network provider in Zimbabwe, has been facing a lot of problems recently. The company has had a hard time with money and has lost customers to other companies. People are not happy with the quality of Telecel’s network and services. There have also been legal issues and arguments about who owns the company. These problems have made it difficult for Telecel to do well and compete with other mobile network providers in Zimbabwe.

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He speaks as the nation is panicking after mobile network providers doubled data tariffs. The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) gave approval for telecommunications companies in the country to double their tariffs in the local currency (ZWL). However, the tariffs in US dollars remain the same. Economic factors such as currency stability, electricity prices, and fuel costs have fluctuated significantly, leading to the need for a review of the local currency tariffs for telecommunications companies, the Chronicle cited industry experts. The move by POTRAZ is meant to support the struggling telecommunications sector. This is the third increase this year due to the local currency losing value against the US dollar, NewsDay‘s Belinda Chiroodza reported. The latest adjustment was made because the currency depreciated by 444% since April. Telecommunications providers raised prices to ensure their services remain valuable. According to Gift Machengete, the Director-General of Potraz, the tariff changes were determined based on the Telecommunications Price Index. He stated:

The last computation for the sector was done in February 2023. At that time, we were using the July to December 2022 post-information. Now, the changes in the Telecommunications Price Index are used to review tariffs, and we did that in February and April 2023. At that time, we produced the tariffs of ZWL$94.41 for voice, ZWL$14.93 for data per megabyte, and ZWL$19.41 for SMS. These tariffs are no longer viable and fall well below regional average tariffs.

There are some people who believe that Econet, the company founded by Strive Masiyiwa, is trying to block competition in Zimbabwe in order to make more money. They say that if other international companies like MTN were in Zimbabwe, they would have left because of the difficult operating conditions. Many international investors and brands have already left the country, including Telecel’s international partner.

Ranga Makwata says if a company like Starlink comes to Zimbabwe, they would leave because of the low tariffs and government price controls. Econet recently had a rights issue to pay off its debts, even though they have invested a lot of money in the country without getting a return. Others said it’s sad that Zimbabweans have a choice between public and private hospitals for life and death matters, but private healthcare can set their own prices while the ICT sector cannot.