NetOne contests Econet measures

STATE-OWNED mobile operator NetOne has made an urgent High Court application to compel Econet Wireless Zimbabwe, the biggest cellular telephony company in the country, to restore interconnection services immediately after the latter cut off the former over debts amounting to US$20,4 million.

Econet had on Thursday cut-off calls between it and NetOne after the latter refused to settle interconnection debts of up to US$20,4 million cumulatively owed to it since dollarisation three years ago.

 

In a notice on Thursday, Econet Wireless said the decision to disable calls to and from NetOne came after the government-owned mobile phone operator refuted an interconnection agreement the two companies had. However, NetOne said Econet’s action was unlawful.

 

“The unilateral and unlawful action carried out by Econet to disconnect both NetOne’s and its own customers from calling across these networks is not only malicious, but a blatant violation of the law pertaining to interconnection in Zimbabwe and against international best practices,” the NetOne said on Thursday.

 

“As such NetOne has made an urgent application to the High Court to compel Econet to restore interconnection services immediately as it is against the law and public policy and is a threat to national security.”

 

According to Econet, NetOne early this month wrote a letter claiming “it had no obligations due and owing to Econet with regards to interconnection fees because it has no interconnection agreement in place with yourselves (Econet).” This repudiation of the interconnection agreement, Econet says, had prompted it to cancel all calls to and from NetOne. Domestic and international telecommunications networks interconnect with one another, and periodically square off costs against each other.

 

It is for this reason that they normally enter into an Interconnection Agreement. “The key to such an agreement is the mutually-agreed cost of terminating domestic and international calls.

 

In Zimbabwe, the telecommunications regulator (Potraz), regulates the cost of terminating domestic and international calls. These rates are 7 cents per minute for a domestic call and 20 cents per minute for an international call,” Econet explained. Econet said NetOne settled all interconnection fees due and owing to the company prior to the adoption of multi-currencies in 2009.

 

The largest mobile phone operator in terms of subscribers and coverage said NetOne had since May 2009 made payments that were way below what was due. “Other than during promotional periods, NetOne has been charging tariffs of above 20 cents per minute on NetOne to Econet calls. Of this 20 cents, 7 cents was supposed to be paid over to Econet,” said Econet.

 

“Therefore, for NetOne to accumulate a debt to Econet of US$20 million, it must have billed in excess of US$58 million to those of its subscribers calling Econet subscribers. In the circumstances, the failure to pass on an amount collected from its subscribers is not only irresponsible but also borders on dishonesty to Econet and NetOne’s own subscribers.”

 

Econet says when it became clear that NetOne was not prepared to honour its obligations under the agreement, the company engaged Potraz, Ministry of Finance, Ministry of Transport, Communications and Infrastructural Development to intervene and force the company to settle its debts.

 

Apart from government and the regulator, Econet said it also approached Zimbabwe Revenue Authority over the issue. “One of these approaches yielded positive results and the current position is that Econet continues to provide services to NetOne, remits VAT to Zimra for amounts collected by NetOne but not passed on Econet,” Econet said.

 

Econet lawyers issued summons in July 2010 for the recovery of US$9 334 million that was due from NetOne as at 10 May 2010 but the matter is still pending before the courts. –– Staff Writer.

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