Zimbabwe Government says blocking MTN, Safaricom entry to protect local telcos

A worker sweeps past an outlet of South Africa's MTN Group in Johannesburg, February 23, 2016. REUTERS/Siphiwe Sibeko

HARARE– ICT minister Supa Mandiwanzira says government is blocking the entry of bigger more resources international mobile networks to protect existing local companies and encourage their growth, but is disappointed with their attitude to sharing infrastructure, a move seen as cutting costs and improving service.

Mandiwanzira says they have blocked companies like the Kenyan Safaricom and South Africa’s MTN ‘who have been knocking.’

“If government did not want Ecocash to be the largest or Econet to be the largest we could have opened our gates for Safaricom to operate a M-pesa in this market. We could have allowed MTN to set up in this market and offer the services that Econet offers,” said Mandiwanzira at the conference in Harare.

“I can assure you that they come with the huge pocket to dwarf any player in this market. They have been knocking on our doors but we have kept them closed because we want to protect them (local mobile operators).

Mandiwanzira was responding to Ecocash general manager, Natalia Jabangwe who told the conference that sharing of infrastructure would not be viable for Econet which has invested over $50 million in Ecocash infrastructure.

“It takes a lot to be able to grow a mobile money payments business…There will come a time when it will be inevitable for the distribution network to be shared but I think we must appreciate that a lot has gone into building the distribution network. In fact; over $50 million has gone into building the distribution network,” added Jabangwe.

The Econet Wireless’ mobile money transfer service, Ecocash, controls 98 percent of the local market with six million customers. Last year, it moved $6,6 billion in transactions.

“It is wrong to assume that you have the first move advantage and therefore you must close out other Zimbabweans from benefiting from a system on which government is spending resources defending you, making sure competition does not come to grab your market,” said Mandiwanzira.

Zimbabwe has two other mobile networks, NetOne and Telecel, both of which are controlled by government.

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