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%.

TelOne Gets GSM Licence

Zimbabwe’s Postal & Telecommunications Regulatory Authority (POTRAZ) has issued state-owned fixed line telco TelOne with the country’s fourth GSM mobile service provider licence, according to a report on AllAfrica.com.

POTRAZ deputy director-general Alfred Marisa revealed that the watchdog granted TelOne the concession late last year in response to a request for GSM frequencies from the telco when its 20-year telecoms licence was due to expire. The regulator added that it had not given TelOne fixed timelines to roll out mobile services, in light of its financially challenged status.

The state already owns a GSM operator, NetOne, the smallest of the country's three cellcos behind Econet and Telecel. NetOne is currently attempting to boost its flagging fortunes under a state-blessed strategy to find a foreign private sector investment partner, with South Africa's MTN the leading candidate. TelOne has also previously been reported to be in partnership talks with prospective foreign partners, chiefly Telkom South Africa, according to TeleGeography's GlobalComms Database, and the addition of a GSM licence could increase the incumbent's attractiveness as an investment.n the matter.

Telecel Says NetOne Is Not Sharing Towers

Orascom-backed mobile operator Telecel Zimbabwe’s CEO Aimable Mpore has accused state-owned rival NetOne of refusing to share cellular tower infrastructure, according to a report in Zimbabwean newspaper The Herald.

In the course of responding to questions on Telecel’s ownership structure from the Parliamentary Portfolio Committee on Media, Information and Communication Technology, Mpore disclosed that Telecel has had no problems sharing infrastructure with the country’s largest cellco Econet or incumbent PSTN operator TelOne, but claimed that NetOne has dismantled Telecel's equipment ‘because the facilities belong to them.’

Mpore called for state enforcement of site-sharing principles.

Zim Not Selling Cellco's Yet, Only Restructuring

Zimbabwean newspaper Sunday News reported that four state-owned enterprises have been scheduled for restructuring before the end of this year, although incumbent PSTN operator TelOne is not on the list.

However, State Enterprises Minister Gorden Moyo said progress had also been made towards restructuring at six other companies – including TelOne, which has been earmarked for part-privatisation – although in these cases it was less likely that results would be achieved by year-end.

Also on the secondary list of six – which includes the likes of Air Zimbabwe and National Railways of Zimbabwe – is state-owned GSM mobile operator NetOne.

In February 2010 the government confirmed MTN South Africa was among ‘several’ foreign companies that had expressed interest in buying a stake in NetOne; in late 2009 MTN and NetOne signed a non-disclosure agreement on their ongoing negotiations. Telkom South Africa, meanwhile, is reportedly eyeing a stake in TelOne, which has also confirmed negotiating with a foreign suitor under a secrecy pact.

Over 70 state holdings have been earmarked for restructuring, under a Corporate Governance Framework which seeks among other things to compel the firms to submit audited financial statements and hold annual general meetings.

Early this year, Moyo instructed the parastatals to disclose audited results by the end of October, and most of the organisations’ financial reports are now reportedly with the Auditor-General.

‘The main problem is that some of the parastatals last presented their results more than five years [ago] and it is not easy to reconcile the books in a short time. But I understand a lot of the companies have now presented their results and the Auditor-General’s office has hired an independent auditing company to help look into the results,’ explained the minister.

MTN's Stake in NetOne Could Fall Through

South African news service Bizcommunity reports that MTN’s planned acquisition of a 49% stake in Zimbabwean cellco NetOne could be in danger of collapsing after it was revealed that some members of the government are opposed to its privatisation. Finance Minister Tendai Biti is said to have told a parliamentary committee that there was growing discomfort over the sale. ‘Some of us are uncomfortable selling NetOne,’ Biti said. ‘We believe it [NetOne's poor performance] is a management issue.’ The reports claims that Biti also said the mobile network business was ‘like printing money,’ and that there was no reason for NetOne to be in its current state when rival cellco Econet Wireless Zimbabwe was ‘making USD65 million every month.’

NetOne is currently the smallest wireless network operator by subscribers in Zimbabwe, despite being the first to launch. At the end of 2009 the company claimed approximately 10% of the country’s wireless subscriber market.

Telkom Confirms Bid For TelOne

Telkom South Africa has confirmed that it is in talks with Zimbabwe's state-owned incumbent fixed line operator TelOne with a view to forming a strategic partnership in which the South African national PTO would assume a management role at its Zimbabwean counterpart.

However, Charlotte Mokoena, CEO of Telkom’s Management Services department, told local press that contrary to some reports, Telkom is not bidding to buy a stake in TelOne. Previous announcements by Zimbabwe’s government have implied that Telkom was negotiating a stake purchase in the cash-strapped telco, alongside several other companies interested in partnering the PSTN operator or the country’s struggling state-run mobile operator NetOne.

The list of interested parties includes another South African company, cellular heavyweight MTN Group. Mokoena continued by saying that Telkom ‘is close to concluding an agreement, to provide management services, such as professional engineering and other functional services, to assist TelOne to prepare and build for the future.’

MTN and Telkom SA Target Stakes In Zim's NetOne & TelOne

The government of Zimbabwe confirmed this week that South African cellco MTN and fixed line operator Telkom South Africa are persisting with advances to buy stakes in two Zimbabwean state-run companies, mobile operator NetOne and incumbent PTO TelOne, respectively.

Local newspaper The Herald reports that the South African firms are amongst several foreign companies that have expressed interest in buying stakes in the two operators. A senior state official was quoted as confirming that MTN and Telkom had made formal bids for the cash-strapped pair, adding that the government was in the process of considering the bids and that the respective investment proposals would soon be presented to Cabinet. According to the unnamed official: ‘Several firms have expressed interest in [NetOne and TelOne] and we are in the process of conducting due diligence on these bids. They will soon be presented to Cabinet before we choose the winner.’

An injection of foreign capital into the underfunded networks of TelOne and NetOne would further the aims of the Zimbabwean government in the communications sector. At the beginning of this week the Ministry of Information Communication Technology unveiled its new National Information Communication strategic plan that will run from 2010 to 2014.

ICT minister Nelson Chamisa said the strategic plan would address issues of infrastructure development and management, assist in the establishment of a governance regime, ICT utilisation, e-business and e-government, cyber security, ICT investment and partnerships. In addition, the plan would also focus on promoting research and development in ICT and also mobilisation of resources to achieve the ministry's mandate of transforming the sector.

‘This strategic plan... promotes the emergence and convergence of information and communication technologies... to transform Zimbabwe into a knowledge society, and pulls the entire nation around a single vision,’ said Mr Chamisa on Monday. The Ministry has already finalised its ICT Bill and is awaiting approval from Cabinet before the legislation goes to Parliament for further scrutiny; Chamisa announced that efforts were being made to pass the bill to the legislature ‘soon’.

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.

Telkom SA Eying Zim's TelOne

Zimbabwean newspaper ZimOnline reports that a 60% stake in the country's state-owned incumbent telco TelOne is being targeted as a potential purchase target by its larger fixed line counterpart in South Africa, Telkom SA.

TelOne spokesperson Collin Wilbesi confirmed the firm was negotiating with a foreign partner, but was not at liberty to identify them. 'We are currently engaged in discussions with some party that we cannot disclose at the moment because of the non-disclosure agreement that we have signed with them. Our negotiations are at a very advanced stage such that we would not wish to jeopardise them by divulging details in the press,' Wilbesi said.

South African government sources said Telkom had already conducted due diligence on the loss-making TelOne, which is bereft of funding for network improvements. The report continued however, that the Zimbabwean government is thought to be reluctant to offer Telkom a controlling stake in the telco, in line with a law preventing a foreign company from owning more than 49% of TelOne. However, Indigenisation Minister Saviour Kasukuwere has said the state was open to discussions on the controversial Empowerment Bill.