Econet Ordered To Restore Interconnection With NetOne

Zimbabwe’s largest mobile operator by subscribers, Econet Wireless, has been forced to reverse its decision to switch off interconnection with state-owned NetOne.

Econet decided to cut services to NetOne owing a dispute over interconnection fees amounting to more than USD20 million that Econet claimed had been unpaid since 2009. However, the country’s high court has now ordered Econet to resume interconnection with NetOne. Econet says it is also trying to recover unpaid interconnection fees from TelOne.

And, in a separate development, Econet says it has begun taking delivery of new equipment that will see the capacity of its mobile network increase to ten million subscribers.

‘Shipment of the equipment, which began in the last few days, is expected to continue well into next year. The equipment is being supplied by Ericsson of Sweden and the Chinese telecom equipment manufacturer ZTE,’ the company said in a statement. ‘The new expansion drive by Econet is also expected to see its investment in Zimbabwe exceed USD1 billion, the largest ever in the country’s history. It follows the approval by the Econet board to "mop up" the remaining demand for lines in the Zimbabwe market.’

At the end of June 2012 Econet had almost seven million subscribers, corresponding to a market share of around 65%.

Econet Cuts Ineternational Rates by 50%

Econet Wireless Zimbabwe has cut its international call rates by up to 50%, meaning users can phone destinations including the UK and South Africa for as little as USD0.004 per second (USD0.24 per minute). Aiming to boost previously flagging international voice revenues, Econet stressed that mobile calls from Zimbabwe to South Africa are now cheaper than the reverse. Zimbabwe’s three cellcos – Econet, Telecel and NetOne – recently introduced a universal per-second billing system for all mobile calls.



Separately, an Econet spokesperson announced that the South African mobile virtual network operator (MVNO) owned by the Econet Wireless Group (EWG) has sold more than 500,000 SIM cards in the last twelve months to Zimbabweans living in South Africa, piggybacking on Cell C's network under the 'Call Home' banner. The spokesperson predicted that Econet Wireless South Africa’s SIM card sales would exceed one million ‘within a few months’. EWG recently set up a similar MVNO service in the UK targetting people calling African countries.

Econet to Introduce Per Second Billing

Econet Wireless Zimbabwe, the country’s largest mobile operator, will launch comprehensive per-second billing for all national and international calls, for all its pre- and post-paid users next month, its CEO Douglas Mboweni has announced. The GSM provider, which currently offers per-second billing on certain services, said the move applies for corporate and residential subscribers, at peak or off-peak times, and on calls to any mobile or fixed network. ‘The cost of making calls will be cheaper, so traffic volumes will increase. We had to first clear issues of capacity before [fully implementing] per second billing,’ Mboweni said, explaining the fact that the firm had delayed the implementation after announcing the move around a year ago. Zimbabwe's three mobile operators – Econet, Telecel and NetOne – were given until September to implement per-second billing by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ); NetOne was reportedly the first network to charge customers per-second but to date has not announced a comprehensive service covering cross-network calls; Telecel is also yet to confirm it will comply with the new billing system. The three cellcos are also facing a 31 August deadline set by POTRAZ to register the details of all pre-paid mobile SIM card users.

Econet gets Credit For Harare Expansion

Econet Wireless Zimbabwe says it will strengthen its mobile network in the capital Harare under a new USD60 million loan from Swedish export credit agency EKN, adding to existing credit lines with China and the Egyptian-based African Export-Import Bank. CEO of Econet, Douglas Mboweni, said the entire facility would be channelled into buying infrastructure for Harare to meet rising demand, adding that engineers from Swedish technology partner Ericsson had already arrived to install the equipment.

Telecel To Launch 3G

Telecel Zimbabwe has revealed it will launch its 3G service within the next three months. Telecel, the country’s second largest mobile operator by subscribers, acquired 3G frequencies in February this year, and if the launch goes to schedule it will become the second domestic 3G operator in the country after Econet Wireless initiated its service last year. The operator said it had constructed an additional 30 base stations across the country to increase network coverage, and will have capacity for 50,000 subscribers at launch.

Ecoweb To Introduce Mobile WiMAX

Ecoweb, the wholly owned ISP subsidiary of Zimbabwe’s largest cellco Econet Wireless, has revealed that it is in the final testing phase of a mobile WiMAX project and will be opening up the new network to subscribers next month.

Ecoweb’s general manager, Tororiro Isaac Chaza, said: ‘The deployment of mobile WiMAX will take place in two phases. In the initial phase, a total investment of 100 WiMAX base stations will be deployed across the country, targeting our main business centres. All the network elements are in place and testing and network optimisation is currently in progress. Deployment of the service is envisaged to begin April 2010 ... The mobile WiMAX network will be capable of carrying mobile, nomadic and fixed services ranging from individual netbooks to large corporate networks. The technology is also suitable for use as backhaul for mobile networks.’

Ecoweb first announced it was preparing to launch mobile WiMAX services in October 2009.

Nigeria Dispute Could Curtail Bharti Zain Deal

Minority shareholder Broad Communications Ltd, which owns 14% share in Zain Nigeria, will seek to enforce its rights in any potential transfer of ownership in the company. The announcement came after Bharti Airtel entered into exclusive talks with Zain until March 25 to buy most of Kuwait-based Mobile Telecommunications Co. or Zain’s assets in Africa in a deal that could be worth up to $10.7 billion.

According to the largest minority shareholder in Zain Nigeria, Broad, the company has not been formally informed by the Zain Group of its intention to sell its 65% shareholding in the Nigerian entity and the company intend to fully exercise its pre-emption rights as directed by the courts and as guided by the company’s shareholders’ agreements entered into between the company’s shareholders.

The dispute over ownership of the largest unit in Nigeria might disrupt Bharti’s third attempt to enter the African market. Econent Wireless Holdings Ltd., a South African telecommunications company is attempting to overturn a 2006 deal in which Celtel, now known as Zain, bought a controlling 65% of the business that had been founded at the beginning of that decade by a group of government, institutional and private investors.

Econet Subsidiary Plans Wireless Network

Liquid Telecom, a majority-owned subsidiary of Zimbabwean cellco Econet Wireless, has revealed ambitious plans for building an international and national fibre-optic transmission network. In an interview with BalancingAct, Liquid’s CEO Nic Rudnick listed the company’s aims. These include: building its own links to international submarine fibre-optic cables (with bandwidth allocations on SEACOM and EASSy systems pending); a 7,500km domestic fibre networks linking all major cities; an international fibre network linking to eight other countries (Botswana, South Africa, Mozambique, Zambia and Namibia in a first phase, and a proposed second phase reaching Angola, Democratic Republic of Congo and Malawi); metro fibre networks in Harare and Bulawayo; and proposed metro networks in two other southern African countries. The network infrastructure is being built by Huawei Technologies of China.

Rudnick indicated that most of the traffic on the network would be Econet’s initially, but that third-party traffic could account for the majority in due course. Econet Wireless set up Liquid Telecom in an attempt to achieve lower international transmission rates than those possible via third-party links to South Africa. The cellco’s development plans for Liquid, which currently operates via satellite bandwidth, were put on hold during Zimbabwe’s economic crash.

Econet Wireless Zimbabwe’s internet subsidiary Ecoweb already operates a fibre-optic backbone covering Harare and Bulawayo, whilst the country’s incumbent PSTN operator TelOne is pursuing a project to build a nationwide high speed fibre network, but has faced obstacles raising the necessary funding. Meanwhile the commercial launch of the EASSy consortium international fibre system has suffered delays and is now expected to be operational in August 2010.

Econet To Introduce 3G Services in Zimbabwe

Zimbabwe's largest mobile operator by subscribers Econet Wireless will launch commercial 3G services alongside an expanded 2.5G data service on 28 August, writes the Zimbabwe Telegraph. Econet CEO Douglas Mboweni said the GSM operator was ready to roll out a comprehensive package of data services based on 3G (W-CDMA), GPRS and EDGE technologies. The new range will be launched initially only in Harare, but extended to all major cities by the end of the year, with the 3G service targeted at the top end of the market and post-paid contract subscribers.

3G capacity will initially be limited to 55 000 customers. Mboweni added that the cellco's GPRS network, which does not support video applications but enables internet browsing and e-mail services, is already being offered to a limited market and would now be substantially expanded with the company's utilisation of new bandwidth. 'GPRS is also being used for other critical services such as vehicle tracking systems and point-of-sale terminals,' he said. Regarding the introduction of EDGE services, Econet says its network in southern parts of Zimbabwe is EDGE-ready.

In other Econet news, The Zimbabwean reports that the firm has cut prices of its bundled handset/SIM/airtime starter-packs in response to the government's removal of duty on mobile phones. Mboweni said: 'We are grateful to the Finance Minister for the concession. Our response is to immediately pass this benefit on to the consumer through this reduction. We are not taking any mark-up on the handsets. In fact, as a gesture of goodwill we are reducing the price even on handsets for which we had already paid duty.'

Econet Challenges Zain Takeover of V-Mobile

The appointment of the final member of an international tribunal to review the sale of V-Mobile Nigeria to Middle East headquartered mobile phone operator Zain, has this week been confirmed by the Chief Justice of the Nigerian Federal High Court.
This comes despite objections by founding shareholder Econet Wireless. Econet claimed its pre-emption rights were breached when the sale was concluded.
In a statement, Econet said that it had been notified of the appointment of the panel and that the tribunal was intending to commence hearings as early as the end of this month.
Econet Wireless was the operator in a consortium of investors that launched Nigeria's first GSM mobile network operation in 2001. The network has grown into country's second largest operator, with about 20 million customers.
Econet claimed that its pre-emption rights in respect of shares had been breached when Econet's predominantly Nigerian partners decided to sell their shares in V-Mobile to Zain in 2006. Consequently, Econet tried to prevent the sale of the shares to Zain through the UK courts, but the judge ruled that the UK was not the appropriate place for such legal proceedings as the matter was more closely connected with Nigeria. Since then, Econet has commenced ongoing legal proceedings in the Nigerian courts.
The tribunal will undertake the arbitration using the rules of the United Nations Commission on International Trade Law, known as UNCITRAL. Arbitration proceedings normally take approximately 18 months to conclude.
In a yet further arbitration concerning the disputed sale, a London Court of International Arbitration (LCIA) tribunal has ruled that Zain was under an obligation, if it involved itself in the Econet transaction, to act in good faith so as to ensure the minimum conflict with Econet possible. This decision was recently introduced into the Nigerian proceedings and will be a key document in Econet's claim in the Nigerian courts going forward.
Meanwhile, Econet has also been pursuing its battle through the Dutch courts, where Zain's African operations had its headquarters at the time of the sale.

Econet Zimbabwe In Battle With Old Mutual

ECONET Wireless, at the centre of what could be a bruising legal defamation battle with Old Mutual, is throwing the gauntlet at the insurance and pension giant and wants it to decide whether it wants to continue to be a key shareholder in Zimbabwe's largest telecommunications company.

Industry sources this week said Econet, which is bitter its name has been dragged into the mud for allegedly influencing the vote at a recent extraordinary general meeting (EGM), believes its battles with Old Mutual are nothing but corporate jealousy as the company now directly competes with Old Mutual through its direct shareholding in Africa First Reinsurance (Afre), which it acquired after becoming a controlling shareholder in ReNaissance.

Econet is now a major player in the insurance and pension industry in Zimbabwe through Afre, formerly First Mutual Limited, which it acquired through its investment vehicle Econet Wireless Capital, which has been investing in non-core telecommunication assets to diversify the group's revenue streams.

Afre, which competes with Old Mutual head-on in the market, is expanding locally and in the region and wants to become the largest in Zimbabwe.

A source close to Econet told The Financial Gazette that since the acquisition by Econet, Old Mutual had fought the mobile phone operator in every forum possible, and as in this case, Econet is confident its nemesis will come out second best.

Econet believe that Old Mutual's executives have become too emotionally involved and it was probably best for them to exit their shareholding in Econet.

"What we saw the other day (at the EGM) is not good for Zimbabwe's corporate reputation. It was obvious to everyone that Old Mutual had simply come to disrupt the process. In the past when Old Mutual did not like something, they engaged us, and even offered us financing alternatives of their own.

"Now they just come to fight us. We sold our shares in their company when we bought First Mutual. They should do the same if they can't deal with us in a professional manner," an Econet executive said.

Already, Econet lawyers have been working round-the-clock making extensive preparations to battle with Old Mutual and its officers for the role the mobile phone group claims Old Mutual played in damaging its reputation.

Initial anger at what was perceived by Econet as an attempt to tarnish its image and that of its founder and directors, has now given way to calm determined preparations for a legal battle with those it considers responsible for allegations of vote rigging at its recently held EGM.

A local daily, The Herald, has already been sued for a record US$2 billion for publishing what Econet perceived to be an inaccurate story.

A spokesman for Econet confirmed that the matter was going to court and "we don't want to talk about it anymore."

At the heart of the battle is an attempt by Old Mutual Asset Management, to cast a vote at the Econet EGM using shares belonging to some of its clients.

Econet threw out the Old Mutual vote on the basis that the insurance group did not have prior authority from the shareholders to vote on their behalf.

Although the vote cast by Old Mutual would not have made any difference to the actual outcome of the vote, the fight over whether they were entitled to vote or not resulted in a massive controversy at the EGM, and also led to media reports where there were allegations of vote rigging.

Econet directors were particularly aggrieved at the reports, attributed to Old Mutual in the media, in which it was alleged that the latter was taking Econet and its directors to court for vote rigging.

"The fact that it was Old Mutual, making these allegations gave them a lot of credence, when the truth is they had no right to vote with those shares. We now have affidavits and letters from the owners of those shares making it clear, they were not aware that Old Mutual had acted in this way. They simply wanted to tarnish our reputation and we are not going to take it lying down," said the Econet executive.

Old Mutual and Econet have been feuding for several years now.

Last year their feud broke out into an ugly fight when Old Mutual tried in vain to stop the merger of Kingdom Financial Holdings and Meikles Africa Limited.

Zain & Essar To Share Base Stations in Kenya

Wireless operators Zain Kenya and Essar Telecom Kenya (ETK, previously known as Econet Wireless Kenya) have agreed to share network infrastructure, Kenyan newspaper Daily Nation reports.

The deal will see the two companies share around 300 base stations for the next 15 years. ETK, which operates under the banner ‘yu’ has over 100 base stations in Nairobi and is planning to expand its network nationwide by the end of 2009. ETK is currently Kenya’s smallest wireless operator by subscribers with a 0.59% market share and is hoping that the collaboration with Zain will aid growth.

Zain claimed over three million subscriptions at the end of December 2008, making it the country’s second largest mobile operator behind Safaricom. The deal will benefit Zain by cutting base station operational costs, as well as strengthening its network coverage in the nation’s capital.

Econet Refutes MTN Interest In Yu

Econet Wireless Kenya, which trades under the Yu brandname, has refuted local media reports that South Africa's MTN has offered US$450 for a stake in the company. The reports are “rumors,” Chief Executive Officer Srinivasa Iyengar told reporters in Nairobi. The story emerged in Kenya's Standard newspaper.

The claimed price being offered by MTN coincidentally matches the US$450 million in debt the network recently raised to fund its rollout plan.

Last year, Econet Wireless International (EWI) sold a 49% stake in the company to India's Essar Communications Holdings (ECHL). The companies said that the move would significantly benefit Econet Wireless Kenya (EWK), which is 70% owned by EWI, from a rollout as well as product offering perspective.

“Econet is not for sale,” Iyengar added. “Essar is a partner for life.” Econet Kenya will change its name to Essar Telecom Kenya Ltd., he concluded.

The network operator was recently reported to have signed up 200,000 subscribers since it launched last November - and is aiming for one million customers by the middle of the year.

Figures from the Mobile World database subscriber database reports that Safaricom is the market leader with a market share of 82.3% with Celtel coming in at 17.6%. Telkom Kenya (Orange) has just started a "mobile" type service. The country itself has a population penetration level of 36%.

The regulator has recently announced that it will make a second attempt at launching mobile number portability - which traditionally benefits new entrants into markets.

Econet Begins Burundi Operations

Mobile operator Econet Wireless has launched its operations in Burundi. The company has for the past year been setting up office, recruiting workers, installing masts and doing preliminary testing. Econet Wireless is now connecting clients for a one-month network testing.

According to East African Business Week, the public has received the new operator with enthusiasm. For quite a while, potential clients were bombarding Econet offices with requests as a result of the sometimes erratic connectivity of the existing service providers. Econet Burundi MD Darlington Mandivenga said during the first 30 days, customers will be connected to test the voice quality and coverage of the network as the technical team fine tunes everything. He said the Econet has "hundreds of thousands" of customers on it waiting list.

Currently, Telecel is the biggest player in the market using the trade name Ucom, with about 295,000 subscribers. The second largest is the state-run Onamob, which has 79,000 subscribers. It is followed by Africell, which recently rebranded to the name Tempo, with 23,000 subscribers.

Yanick Mugisha, the brand manager at Econet told East African Business Week the plan was to have over 100,000 subscribers in the first month. The clincher for Econet may be the SMS interconnection agreement it has signed with the other operators, as to date, mobile users could not send SMS from one mobile operator to the other.

The network testing will cover about 16 provinces where Econet has installed base stations. Econet hopes to cover 94 percent of the country by the time it launches its network in a month's time.

Econet Kenya Hits 200,000 Subscribers in Three Months

Econet Wireless's newest network, in Kenya is reported to have signed up 200,000 subscribers since it launched last November - and is aiming for one million customers by the middle of the year. Econet Wireless trades under the Yu brand in the country.

"Now we have close to 200 000 subscribers but the target is to have one-million by July," Econet Kenya's chief executive, Srinivasa Iyengar told Reuters. "In another two to three years, we should have four-million to five-million subscribers easily."

"We are the ... cheapest (network) in town today and we will be the cheapest forever," he said at a promotional road show.

The firm recently secured the Sh 35 billion (US$450 million) loan necessary to fund its network rollout. The deal had been delayed by two months after Econet reported difficulties finding credit during the current global economic downturn.

Last year, Econet Wireless International (EWI) sold a 49% stake in the company to India's Essar Communications Holdings (ECHL). The companies said that the move would significantly benefit Econet Wireless Kenya (EWK), which is 70% owned by EWI, from a rollout as well as product offering perspective.

Figures from the Mobile World database subscriber database reports that Safaricom is the market leader with a market share of 82.3% with Celtel coming in at 17.6%. Telkom Kenya (Orange) has just started a "mobile" type service. The country itself has a population penetration level of 36%.

The regulator has recently announced that it will make a second attempt at launching mobile number portability - which traditionally benefits new entrants into markets.

Kenya's Yu Gets US$450 Million Boost to Fund Rollout

New entrant into the Kenyan mobile market, Econet Wireless (trading as Yu) has secured the Sh 35 billion (US$450 million) loan necessary to fund its network rollout. The deal had been delayed by two months after Econet reported difficulties finding credit during the current global economic downturn.
The move comes just a few days after the company's Managing Director unexpectedly resigned. Mr Micheal Foley resigned last Tuesday “to protect his integrity in the midst of a tightening in the company’s liquidity caused by delay in securing credit.” It was reported by local media that suppliers were getting impatient with difficulties in getting bills paid on time.

Acting MD of Econet Wireless Kenya, Srinivasa Iyengar, told the Business Daily Africa newspaper that the network operator expects to commence operation in Mombasa next week and is in talks to sign a network sharing contract with one of the incumbent operators.

Econet is thought to have signed around 60,000 subscribers since its launch in Nairobi last November, and is aiming to secure three million users in the next three years.

Last year, Econet Wireless International (EWI) sold a 49% stake in the company to India's Essar Communications Holdings (ECHL). The companies said that the move would significantly benefit Econet Wireless Kenya (EWK), which is 70% owned by EWI, from a rollout as well as product offering perspective.

Figures from the Mobile World database subscriber database reports that Safaricom is the market leader with a market share of 82.3% with Zain coming in at 17.6%. Telkom Kenya (under the Orange brand) has just started a mobile type service. The country itself has a population penetration level of 36%.

The regulator has recently announced that it will make a second attempt at launching mobile number portability - which traditionally benefits new entrants into markets.

Zimbabwe Mulls Reduction on VAT for Mobiles

Zimbabwe's acting Minister of Finance, Patrick Chinamasa has proposed a cut in the value added sales tax on mobile phone airtime from 22.5% to just 15%.

“I propose to standardise the rate by reducing it to 15% with effect from 1 February 2009, in line with the prevailing general level of VAT on other products,” he said. “This should translate into lower mobile phone tariffs.”

The operators have come under pressure to lower their tariffs, despite the hyper-inflation being felt in the country. However they claim their tariffs are comparable with the region - but are being hurt by the high VAT rate, which at 22.5% were the highest in the region.

At the end of last year, Econet Wireless announced that it would start charging in foreign currency in order to fund improvements to services by enabling the company to invest in new equipment and settle its foreign currency obligations.

Econet Wireless is the largest operator in the country by subscriber numbers. According to estimates from the Mobile World, the operator ended last September with 977,000 customers and a market share of 64%. The country has a population penetration level of just over 12%