Supa Mandiwanzira moves to reduce EcoCash dominance

Supa Mandiwanzira moves to reduce EcoCash dominance

Market share of mobile money subscriptions

THE Minister of Information Communication Technology and Cyber Security, Supa Mandiwanzira, has moved to break Econet Wireless’ domination of the mobile money payment market by setting a deadline by which the country’s three mobile network operators (MNOs) should integrate their mobile money platforms to allow cross-network money transfers.
In a recent statement, Mandiwanzira set April 1 as the date by which the three MNOs should make their mobile money services inter-operable, failure of which government would take “appropriate measures to enhance compliance”. Zimbabwe has three mobile service providers, namely Econet, which operates EcoCash; Telecel Zimbabwe, which offers TeleCash; and NetOne, which offers OneMoney.
At of the end of 2017, EcoCash controlled 98 percent of the country’s mobile money payment sub-market. In August last year Mandiwanzira claimed Econet’s dominance of the country’s mobile money payment system exposed the country to risk, should the largest telecommunications firm’s systems fail.
“Ninety percent of the transactions are being controlled by one mobile network. That is a disaster,” Mandiwanzira said.
“It may be a commercial success, but it’s a disaster if we look at it from a public sector point of view. What happens if that system fails at a critical moment? That means we have disrupted the entire nation because we have relied on one supplier,” he said.
Apparently, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) revealed that groundwork had been laid for the inter-operability of mobile financial services.
POTRAZ director general, Gift Machengete, told The Financial Gazette that the regulatory body had started putting in place modalities to make it possible for transactions across networks.
“The interoperability of mobile financial services platforms is a process. Consultations with the three mobile operators, the Reserve Bank of Zimbabwe (RBZ), the Competition and Tariff Commission and POTRAZ were done and the mobile network operators (MNOs) were directed to integrate their platforms,” Machengete said.
“Currently it is possible to send money to an unregistered customer on another network. However, the Unstructured Supplementary Service Data platforms for MNOs are not yet fully integrated as this is an ongoing process,” he said.
At the moment, EcoCash, the largest mobile money platform, is connected to several banks and to ZimSwitch, but it has no relationship with TeleCash and OneMoney.
The other two players are only connected to one or two banks, making seamless transactions impossible for the users.
Tanzania, which has the most developed mobile money system in sub-Saharan Africa, took three years to fully integrate the services between its four mobile service providers.
Kenya, whose mobile money market is 80 percent dominated by one player, is expected to finally launch its own inter-operability service this month after that country’s regulators made it mandatory.
In December, an RBZ senior official revealed that the central bank had no immediate plans of forcing inter-operability on mobile money operators.
RBZ head of oversight and risk management, Douglas Murandu, said the central bank was still hopeful that moral suasion, rather than coercion, would help the players see the benefit to consumers.
“Inter-operability is technically feasible but the challenge in terms of implementation is with the commercial agreements between the players. As the regulators, we do not want mandatory inter-operability,” said Murandu.
He, however, said in the event that the players failed to agree, the central bank could be forced to intervene.
The move by Mandiwanzira is seen benefiting NetOne and Telecel, the two State-owned telecommunications enterprises falling under his Ministry.
Already Econet is unhappy with Mandiwanzira’s directive to shares its infrastructure with NetOne and Telecel.
The firm, which has invested more than $1 billion in infrastructure in the past two decades, sees the move as an attempt to let its under-capitalised, State-run competitors ride on its investment.
“You cannot hold an asset that you were given by government through a license and think that it is entirely yours. Others must access what you have built but they should do so at a fee, a reasonable fee.
“That is the message we have given to Econet, NetOne and Telecel. You own the frequency to the extent of your license but we can also tell you what to do,” Mandiwanzira said.
In 2017, a total of 754 million transactions worth $18 billion were conducted via the mobile services platform.
newsdesk@fingaz.co.zw

  • Mbimbindoga Chidembo

    I see a hike in transaction fees on the horizon…there is is a lot of greed about.

  • Masotsha

    Sound like 1April prank

  • http://www.yaniso.com Tofara Yaniso Dube

    Dominance by one network is not good for competition. However, we must ask ourselves whether Ecocash committed a crime in its way to dominance. I have so far heard nothing to suggest that. Create interoperability, but let’s not make it sound as if business success is a crime. If anyone has to be punished it is those who were given a licence but still failed to achieve reasonable success in the market.

Connect With Us

Fingaz Polls

CEO term limits...good or bad idea?