A new law that came into effect last week giving state phone company Tel*One a complete monopoly over international traffic could force Zimbabwean mobile service providers to charge international outgoing calls in foreign currency, the head of the country's largest telecoms company has warned.

A statutory instrument gazetted in March, compelling mobile phone companies to route their international traffic through Tel*One, was due to come into effect last week. Douglas Mboweni, CEO of Econet Wireless, warns that this could see subscribers paying for international calls in forex.

"Currently, making an international call is a right enjoyed by every customer, and we need to keep it that way. If we allow this statutory instrument to proceed without amendments, then only a privileged few will have access to international calls," Mboweni said this week.

Operators are concerned that, because of termination rate arrangements with foreign operators, Zimbabwean operators will now no longer have access to foreign currency to pay overseas networks.

"There will be complete chaos and people will either face blackouts on international calls or have to pay in foreign currency. We will have the same problem in telecoms that we currently have in power," Econet spokesman Sure Kamhunga said.

He said that whenever a subscriber on a network in Zimbabwe makes an international call to a subscriber on an overseas network, the Zimbabwe subscriber pays the home network for the call in Zimbabwe dollars, but the home network still has to pay the international network to which the receiving subscriber overseas is connected, what is called a termination rate, and this is charged in US dollars between networks.

On the other hand, when a person in Zimbabwe receives an international call, their home network charges the operator that sent the call in US dollars. At the end of each month, the operators then exchange invoices for calls made between their customers.

The operator whose customers made the most calls pays out the difference to its counterpart. Operators generally try to get a balance in the flow of traffic between them to avoid any net payout. "If you divert traffic destined to our customers away from us to come through Tel*One, then we will be pushed out of the settlement system completely," Kamhunga cautioned.

If this happens, Zimbabwean operators would either be cut off, or forced to charge their local customers in foreign currency for international calls. The new law gives Tel*One sole access to the forex earned on the incoming calls to other networks, but will only pay them in Zimbabwe dollars. However, the mobile operators will not be able to pay other networks for international calls made by their customers to those other networks overseas.

Said Kamhunga: "There is no precedence for such an arrangement, and it is dangerous in a country where there is no foreign exchange." CEO Mboweni also said contrary to perceptions, Econet did not make a lot of its money from international calls, saying these only accounted for less than 10 percent of revenue.

"We are a public company and this information is available for anyone to see. The Reserve Bank knows exactly how much we make, and it's not that much. What is important about the income we get from international incoming calls is that it is used to offset the foreign currency obligations we get each time a customer makes an international call. If we did not have that off set mechanism our customers would have to pay for international calls in foreign currency," said Mboweni.

Financial Gazette