HomeBusiness DigestTelecoms find scapegoat in forex shortages

Telecoms find scapegoat in forex shortages

Shakeman Mugari

“ECONET Wireless Zimbabwe has completed a major expansion of its local network, which will enable it to add more customers onto the network,” reads part of an Econet statement rel

eased in March last year.


The one-year-old statement quotes chief executive Douglas Mboweni saying Econet is building additional base stations to ease network congestion in the urban areas.


“The increase in base stations should see customers experience fewer dropped calls,” Mboweni said.


A year after these bold declarations, Econet’s service provision has not improved. It has in fact gotten worse over the past three months, with congestion making it virtually impossible to go through the network. The number of dropped calls has also increased drastically.


A call attempt triggers a number of responses. Either there is “a error in communication”, “Number not in use,” or the call is simply dropped.

Messages sometimes take more than five hours to reach their destination.

Customers and other stakeholders are beginning to feel the impact of the lapse in services. Companies are losing business due to network problems while the man on the street is fast losing faith in the network.


But despite the public outcry, Econet has continued to hike its tariffs. Last week the company increased its charges by an average 15%.


The prepaid service (Buddie) now costs about $2 200 a minute from last year’s $1 800. The Business Partna package (contract), a service used by most companies, increased its rate to $1 400 a minute from $1 200.


Subscribers complain that Econet’s service does not justify the increases.

Although Econet seems to be the main target of this public outcry because of its size, there are indications that subscribers of the government-owned Net*One and Telecel are not getting any joy either.


There is serious congestion in the networks while dropped calls are also prevalent.


The three companies have dismally failed to provide decent services to frustrated customers.


Zimbabwe’s telecommunications industry has been lagging behind most regional economies, especially South Africa. Zimbabwe is the second largest economy in southern Africa after South Africa.


Zimbabwe’s telecommunications industry is far behind that of South Africa, both in terms of technology and subscribers.


According to recent numbers, the three South African cellular network providers — Vodacom, MTN and Cell-C — share about 20 million subscribers.

Telecoms experts say the figure is likely to rise in the next few years as more South Africans become connected.


The three local networks combined cannot match the subscriber base of Cell-C, the newest cellular company in South Africa. And contrary to the local situation where cellular companies continue to hike fees at will, South African companies recently cut their charges to enhance competitiveness.

“In Zimbabwe companies don’t even have to advertise, there is no competition. Subscribers are stuck with one network,” said a former Net*One engineer who is now a telecommunications consultant.


Zimbabwe’s three networks share just over half-a-million subscribers. The cellular companies have failed to increase their subscriber bases despite the huge market potential.


There is also a serious shortage of lines in Zimbabwe. The few lines available have found their way onto the black market where they fetch 4 000% more than their actual price.


A Net*One line costs $270 000 on the official market and as much as $2,4 million on the parallel market. Although the normal price for Econet’s Buddie line is $200 000, it costs $2 million on the black market.


There are allegations that cellular phone company employees are part of the syndicates that release the lines on to the black market because of huge demand. On the official market lines are always in short supply.


Comparatively, in South Africa customers can buy a phone line from vendors on the streets. There is a cut-throat competition from subscribers.


An application for a mobile line takes more than one year while according to a 1999 research it takes four years of waiting for one to get a fixed network.

There are more than two million people waiting for connection of either the mobile or the fixed phones.


There are also many Zimbabweans in the remote areas yet to make their first phone call.


For those who can afford a line, the choice is limited. Although Net*One has tried to improve its coverage across the country, its network continues to be a nightmare for customers. Telecel is basically an urban network which disappears as soon as one gets out of town.


Econet is probably Zimbabwe’s biggest network by way of subscribers, but their charges and congestion frustrate users.


It has become a sector problem which the networks now blame on lack of foreign currency and the general economic decline.


Econet maintains that its efforts to upgrade its network have been hampered by serious foreign currency shortages.


The foreign currency explanation has become a chorus among all service providers who seem to have found ready a scapegoat for their problems. Recently, Telecel blamed its failure to provide sim card replacements on forex shortages.


The companies also say there are capacity problems in the sector.

“We started software upgrade at the central switches in December.

Unfortunately, we do upgrades on the live network because we do not have the capacity to have testing switches,” said Mboweni last month.

Still experts believe there is more to the crisis. A research by Scientific and Industrial Research and Development Centre (SIRDC) in 2001 found that, contrary to the popular complaint about capacity, the mobile equipment in Zimbabwe was highly underutilised.


The research, carried out to quantify the local network infrastructure, said the mobile telephone services could improve if the three networks worked together.


“There is a lot of individualism in the networks,” said a SIRDC official who was part of the research.


“We have companies whose base stations are not being fully utilised in other areas. Those companies can let other networks use their stations. The reverse can be applied in other areas.”


This is the same situation in South Africa where for example Vodacom can let Cell–C, a competitor network, use its bandwidth for a fee. In Zimbabwe, however, telecom companies rarely share infrastructure.


Players in the industry believe that government has also contributed to the problems in the sector. They say the industry needs more players to promote competition.

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