Econet Wireless Zimbabwe may have made a huge blunder by pulling out of the infrastructure sharing negotiations, as this myopic move will catch up with them in the long term, forcing them to adopt a national framework drafted outside their contribution.
While liquid Telecom may also have pulled out, the conditions will likely turn out to be different as Econet wireless competitive advantage can easily be eroded only should two mobile operators, thus Netone and Telecel agree to share infrastructure.
The complexities of sharing infrastructure for Mobile Network Operators, (MNOs) are quiet different from Intenet Access Providers (IAP), and the government will be wrong to give a blanket approach to these separate issues.
While it is logically and financially bad to have all MNO`s installing base stations in the same area especially in the remote and expensive resort towns up the mountains where they all have obvious business interests, it would be folly to discourage independent IAPs to do the same.
Its obviously resource wasting for MNO while for IAPs it’s the best thing ever, in data channels redundancy is the core of any network. If there is a network break like what once happened with Liquid link in Messina, then you are pitting the whole country in darkness in the name of infrastructure sharing, so fall backs and independent players are ideal for IAPs and not for MONs.
Liquid Telecom still has a major advantage of fibre spawning across continents and they may honestly have no will power to share and nothing to lose should they remain independent but on ground, at a certain point and time, every player is already sharing infrastructure one way or the other.
Econet Wireless Zimbabwe made a shocker U-turn, as they abruptly pulled out of the infrastructure sharing negotiations ,an engagement which has been on-going for over an a year, attracting the ridicule of the ICT Postal and courier services minister Hon Supa Mandiwanzira.
Speaking during a live radio session interview on ZiFM, Hon Mandiwanzira said that Econet Wireless and Zimbabwe and Liquid telecom were under orders from London to pull out of the discussions, after a year of engagement, a move his ridicle.
“Econet had well negotiated all the way and government was not laying the rules but allocated all the players to negotiate framework, what then shocked me was that Econet and Liquid all said that there were willing to discuss best ways to share, but unfortunately their shareholder from London gave them a directive to stop the negotiations”
When we contacted Econet Wireless Zimbabwe for comment, their group media advisor Mr Sure Kamhunga maintained that they will not be commenting on the matter or explain their move adding obscurity into the matter.
Earlier on, Econet Wireless Zimbabwe had issued a public statement expressing their reservations towards the methodology of the whole process
“Econet is an indigenous company with a large shareholder base that includes most pensioners through the National Social Security Authority, Old Mutual and many other pension funds. Our share register has thousands of shareholders who all made painful sacrifices to invest in this infrastructure.
The tone that the current debate on infrastructure sharing has taken appears aimed at compelling Econet Wireless to make its infrastructure available for the use of others who chose other investment priorities. We would be betraying the Government of Zimbabwe and thousands of pensioners and other shareholders who chose to forgo dividends in order for us to develop our infrastructure. Therefore, the type of infrastructure sharing under debate is not feasible. It is a disguised, unconstitutional form of compulsory acquisition of our infrastructure.”
Ironically, government did not any point spell out the way to share but in fact called in operators, tasked them to sit down and negotiate the best way forward which then they will bring back as the best way out, meaning that Econet was not ordered to give away its investment on a silver platter, but rather given a platform to debate and offer their own proposition.
This of course will leave a can of worms considering that Econet last year had some issues of evasion tax laid against them, and should they openly declare how much their infrastructure is worth, chances are that this will not be the correct reflection paid against their taxes so it put them on a tight spot.
While the newly appointed ICT minister may seem too pushy on the agenda, adding a 90 day ultimatum to see a finalisation on the matter these talks were already legally stipulated inside the statutory instrument of 2001, a move which the national regulator POTRAZ, instead has been sleeping on it.
Now that we are in the highly converged age, everyone is now running around to make sure that we comply with a statute that was laid down 14 years ago, and issues of complacency and resistance are going to be obviously faced
The minister said that by November this year we must have a framework in place, and its easy that we share the passive infrastructure first, like towers, basestation, lying fibre and generators before they look into the complexities of active infrastructure that includes actual data throughput transmitted in the passive infrastructure.
The minister is advocating for infrastructure sharing which is meant to see capital costs running between 30 -40%, but for companies like Econet and Liquid Telecom , they may as well not be interested since they have already invested in areas of serious business interests.
Econet is not willing to give away their infrastructure competitive advantage which is currently making them dominate with a whopping 70% market share, but government says it needs a framework that protects those who have already invested.
The major ill with such a move is that we have allowed a system where players have infrastructural advantage over others and they are not competing in services but mere coverage.
In most developed countries, all operators have agreed to share their infrastructure and they are now competing on services not infrastructure.
It will take a new policy and will power that will see companies like Telecel and Netone sharing both passive and active infrastructure gaining them close to 90% coverage especially considering that Netone is already rolling out their 4G network.
Econet wireless will regret the move, instead of them relying on their 70%, 3G based base stations, they should be celebrating the 218million loan given to NetOne since its going towards 4g investment, an area they have not covered much with less than 30% nationwide.
Government is the one that should be more worried because the future is no longer on basic GSM or 3G network, its all going to be IP based and players like NetOne have already bought the expensive frequency and have on-going loans to capacitate, which Econet should start eyeing for their 4G project not opposing.