Zimbabwe CTC goes after Econet

Mergers, Acquisitions and Financial Results

The Competitions and Tariffs and Commission has started gathering information, which may result in a fully fledged investigation on alleged uncompetitive behaviour by Econet Wireless.

CTC has arranged a meeting with Econet officials to ascertain the facts around the allegations for them to develop a background position of the challenges they are being accused of by various business entities.

The commission will engage the Reserve Bank of Zimbabwe and the Postal and Telecommunications Regulatory Authority of Zimbabwe as regulators of banks and mobile network operators to better understand the regulatory issues around mobile money business.

“We are making preliminary investigations on allegations levelled against Econet Wireless of its uncompetitive behaviour on the telecommunications side.

“The commission is still establishing facts and doing interviews with complainants who have levelled allegations against Econet,” a source who could not be named for professional reasons said.

Various entities have raised complaints against Econet, alleging that the mobile network is involved in uncompetitive behaviour and monopolistic practices.

In the forefront has been the banking sector, which has raised issues with Econet with regards to the opening up of mobile banking streams and a directive that all suppliers to Econet have to have an account with Steward Bank.

Econet clashed with banks after it agreed in February 2014 to connect banks onto the USSD platform for other value added services but ended up creating a separate USSD to EcoCash for banks in particular for mobile money transfer services.

The implications for setting up a separate USSD for banks were that Econet would be able to charge banks a separate tariff which is much higher than the prevailing SMS charges and also much higher than what Econet is charging those who are hooked onto EcoCash.

This is viewed as an unfair trade practice as it is designed to make banks’ mobile money transfer services uncompetitive in comparison to Econet’s own product. The tariff is also significantly higher than what other mobile network providers are charging for a similar service.