Battle for Broadband market begins

AT THE launch of EconetBroadband last week, Econet Wireless CEO Douglas Mboweni, was a proud man — the launch was a success.

But elsewhere, new and old competitors in the same business were also on the drawing board to ensure Zimbabwe’s largest mobile phone operator does not simply push the small boys out of business as easily as the company has done on the voice side. 
On the same day, Africom, an erstwhile Econet competitor, splashed full page newspaper advertisements with an even sweeter offer as if in a bid to overshadow the launch.  While Econet had initially offered 3G to its clients at US$25 monthly, Africom was offering 1Gigabyte for US$15. Econet now charges US$98 for the same bundle.
As if the challenge by Africom was not enough, Econet’s “most ambitious project” since its 1998 launch that saw US$100 million being spent on the data business, the company’s traditional competitor on the voice business — NetOne — finally got the nod from parliament that would enable the company to roll out its 2G and 3G network.
But analysts say NetOne might be a little late for the party because the company is a new kid on the data block. As such it would have to commit the bulk of its money on fibre optic and also attempt to link to the undersea cable in Mozambique. Strangely, companies in the sector have avoided sharing infrastructure among themselves, a development analysts say only serves to duplicate investments in the business.
Econet’s other competitor, Telecel, is also planning to roll out its broadband network. Again, Telecel is also digging its way to Mozambique. Econet’s reluctance to share infrastructure is understandable, the company has spent an arm and a leg. A total US$100 million has been spent on new base stations and related infrastructure.  
The Econet network uses the latest 3G and WiMax technology, and is linked together by a fibre optic transmission system and satellite back-up to ensure reliability.
“We have essentially connected Zimbabwe to the global digital economy,” Mboweni announced.
Although Econet has the largest coverage on both data and voice business, it still has to claw back market share from the likes of PowerTel, ZOL, Africom, Broadlands, who are also offering broadband at competitive prices. And already, Econet customers are not smiling.
Those using 3G, a mobile system designed to support high-speed data transmission and internet protocol, were paying a flat fee, US$25 monthly but are now supposed to pay US$98 for a 1Gigabyte data bundle which should be used up in 30 days. This again does not exactly play in favour of Econet.
Africom sells the same bundle for US$15 excluding tax for a month. However, the catch is that anything beyond that 1Gig is paid for at US$0.10 per megabyte translating to around US$100 per 1Gig.
PowerTel was the first to announce the launch of broadband and it charges US$50 for unlimited internet access monthly, which appears to be the cheapest on offer but the catch is that it is not as widespread as that of its competitor. The company said they are looking at further expanding beyond Harare.
Econet leads the voice market with 4,1 million subscribers followed by Telecel with 1,27 million and NetOne with 1,1 million subscribers.
This signals a rapid transformation in terms of internet access in the last two weeks with the launch of the broadband by various service providers but subscribers continue to be subjected to slow speeds and an increased cost.
In ideal situations, internet costs continue to drop as the development in technology and increased competition have seen improved efficiency, but in Zimbabwe the last fortnight has seen the opposite.
Internet users, who bore the slow speeds, hoped for a change as the broadband, a fairly new technology that provides high-speed wireless internet and data network access over a wide area, was introduced.
While speed was an issue, consumers were also eager to know how much they would pay to surf the net as they have also been subjected to very high costs, especially those who use internet cafés paying US$1 for half an hour.
Cost remains a headache as most internet users are yet to ascertain how much they would be paying to access the internet.
The launch by Econet last week replaced the company general packet radio service (GPRS), Enhanced Data rates for GSM Evolution (EDGE) and 3G platforms.
Though there was a forced migration of those on the 3G platform to the new system whose charges have been described as unaffordable by consumers, Econet adopted customers who might opt out and connect with other cheaper players. The reasoning is simple; other players are cheaper.

 

Chris Muronzi/Leonard Makombe

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