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NetOne manages to set up 652 base stations across the country

by Stephen Jakes
23 May 2016 at 07:12hrs | Views
The government owned mobile network provider NetOne has reportedly recorded significant grown as it has since managed to set up 652 base stations across the country and having a combination of 3G and 2G technologies.

This was said by Kuwadzana MP Neslon Chamisa in parliament when he said
a previous report was made on the mobile networks in Zimbabwe focusing on the state of the mobile sector and the impact on the economic growth, appreciating also the challenges that have been faced in the sector, the relevance of the financial services and other over- the-top transactions that are taking place on the back of our networks.

"We also looked at the general recommendations that we are putting forward for purposes of improving the sector.  Infact, this is where I am going to zero-in on most importantly, though I will just go through the report to touch on the various aspects that are supposed to be debated and worked upon," said Chamisa.

"In terms of our Committee, we held field visits to Net One, Econet as well as Telecel Headquarters. The purpose of our visits, apart from being entertained by our hosts, we had a good time just to enjoy the kind of work that is being done by our service providers.  They raised a number of challenges that they are facing, particularly at Net One.  You may be aware that currently they have had challenges with their books and this has necessitated the sending on forced leave of their Managing Director, Mr. Kangai."

Chamisa said it is an issue that was highlighted to them.

"We also got to understand and know that Net One recently got a boost in the form of a loan from China Exim Bank and to that effect, NetOne has since grown its subscriber base although it remains the laggard of the mobile sector being the last one. It was the first to be born but the last one in terms of growth. Its growth has been standard for reasons that I am going to then highlight," he said. "They have since managed to set up 652 base stations across the country and having a combination of 3G and 2G technologies. They also have been operating since 2000 and this is what has given birth to the kind of trajectory we have seen that seems to be taking course in that network."

Chamisa said in terms of challenges, their turnaround has been hampered by the system of tenders.

"You may be aware of the fact that in technology changes are so supersonic and dynamic but the change has not been met with the attendant speed particularly with Procurement Board taking all those other processes. This has made it very difficult for NetOne to be able to then compete with other network providers that are in the private sector because they have to go through this bureaucratic red tape process for them to have certain tenders approved. It has been a challenge in terms of their rate and speed of innovation, creativity and also to be able to cope with the competition from other sector players," he said.

"You may also know that most state owned entities are positioned in a very difficult position when it comes to a conducive environment for innovation. NetOne has not received any capital injection other than by way of loans - the loans that I have already indicated."

Chamisa said in terms of NetOne, they have serious constraints but particularly the short term loans that have very high interest rates and it is a very disturbing trend because their revenues are being squandered on account of roll outs of  existing network infrastructure.

"Clearly this has impacted negatively on the viability of NetOne's operations and also the scope of their development and advancement. They have indeed achieved quite a lot. For the first time, they have recovered from losses and they have transformed themselves into a profitable entity," he said.

"For example, in 2013, they managed to have profit and their subscriber base as I have already indicated has also increased. They have managed to do those switch centres that I have also indicated. They are expanding into the rural areas. In fact, their reach is more prominent and their footprint is more widespread in the country side."

"They have also launched a payment system called ‘One Wallet' for money transfer services and also airtime top-up and utility bill payments. This I would say is a positive development. They have added value to our GDP and they have added value to our commerce and business transactions."

He said as regards Econet,  the company was also set up way back. He said they have since grown in leaps and bounds.

"In terms of being a contributor, they have contributed to the Universal Services Fund (USF) to the tune of over $43m having been contributed to date since their formation. It would  appear that their gravamen or complaint has been that they are the ones that are consistently and continuously contributing to the USF. Most of the other companies, they allege are not contributing. It is a matter that we raised with the Minister and he has since indicated that it is an issue that is being sorted out," Chamisa said.

"The Econet advised us that power supplies, although they have greatly improved, they continue to have a problem with power. This is why Econet has almost become a power service provider. They are almost competing with ZESA because the number of generators they have are almost able to power in the minimum 10 suburbs because they have huge and mega generators across the whole country. Only if these generators were to be pooled together, they would really enhance the kind of output we would have when it comes to power."

"They were complaining but it is a challenge of power supplies, an issue that they are dealing with. They have also said that they have become again a road builder because roads are very bad particularly in rural areas like Gokwe and Mhondoro. They have had to construct road networks to access the various base stations. They have invested a lot of money into road construction, particularly working with local communities. This has also taken a lot of their revenue to be able to do work that traditionally would be done by other department within Government," he added.

The former Technology minister said they also indicated to them that in some instances, they have had to use helicopters to erect and set up base stations.

"Meaning to say that the kind of resources that are required are quite expansive and extensive and this has also militated against the smooth functioning of the company. They have exceeded their roll outs in terms of achievements. They also indicated that they have invested in excess of $1.2bn over the last 6 years."

" They have been a star company according to them. They have done very well. They have created jobs and they have supported downstream businesses in the economy, particularly the air time sellers, vendors on the streets, Ecocash merchants and agents, kiosk operators to more sophisticated suppliers of goods and services within the country," he said.

"To date, Econet indicate that they have a network of 22 000 Ecocash agents and 20 000 merchants who are activated to sell airtime complemented by over 1 500 air time vendors. In terms of Ecocash, they boast that they have transformed the financial landscape in Zimbabwe involving the quickest and most efficient money transfer service to date. I am sure most of the Members of Parliament have benefited from Ecocash because it is a facility that is convenient particularly where you have the unbanked or under-banked in our country where you do not have the network that would ensure that banks on account of viability are there."

He said they are also helping to drive the value of the money platform in Zimbabwe's informal sector and they value their contribution at an estimated $2bn.

"Clients have also received salaries, made different payments of goods without necessarily handling cash. I would say in line with Minister Chinamasa's request that we go "e", they have taken the lead by making sure that Ecocash becomes the lifeblood and lifeline for most communities. Instead of people being in the queue at banks they are now online and they do not need to be in the queue, a big improvement and also a positive development.  In addition to those partnerships, they have done some important synergies and networking handshakes with mobile transfer agencies across the whole world; Western Union, MoneyGram and WorldRemit to ensure that money is mobile and money is being transacted without any undue hardship," Chamisa said.

He said they are also powering up Zimbabwe, making sure that they provide safe and affordable power to homes.

"Econet is part of the green campaign in which the company is investing in alternative energies, raising environmental awareness by alleviating the crippling impact of worsening power cuts on the service.  They have also done things to do with improved security."

"Their contribution in education - consistently helping, what they call the Basic Education Support, through what is called the Higherlife Foundation.  Over the 12 months of 2015, 23 000 children from primary schools and tertiary schools were assisted with school fees.  Since 2010, according to Econet, they have assisted more than 76 000 children through Basic Education Scholarship Programme.  By bringing ICTs to various centres in the communities.  They have also set up learning hubs through what is called Higherlife Foundation.  Their Learning Hub is a dynamic learning environment to promote communication, collaboration and creativity," he said

"They set up 28 Learning Hubs in Zimbabwe in more than 3 000 community centres, which is quite an improvement.  They have also built synergies with suppliers, but they complain fundamentally that the over the top transaction services are reducing their revenue.  Over the top transactions - this is whatsapp, skype, those other platforms that are done on the strength of the internet.  They are able then to make calls without necessarily bringing revenue for the dialing that is supposed to be done."

"So, they are complaining that those are wreaking havoc.  They would want us, as Government, to try and legislate that area.  We told them that it is not a helpful or productive arrangement.  You need also to compete on those platforms by making sure that services are indeed developed to effectively help our customers and consumers."

He said in terms of Telecel, you are aware that Telecel was recently acquired by Zarnet.

"They have a switching capacity of about 4.5 million with subscribers connected to their platform being 4.7 million in which 2.3 million are active subscribers.  They also have been grappling with shareholder issues.  They have now since resolved the shareholder issues, hoping that this will pave way for the flying and flourishing of the company.  They have also had challenges which are the high cost of borrowing due to the need to fund capital intensive investment.  They are negotiating with vendors and other financiers to introduce more services," Chamisa said.

"Power supply – again, just like Econet it has been a big and major challenge.  Traffic refilling is a major issue for Telecel.  Traffic refilling is whereby there is termination of communication on certain networks without necessarily paying for the termination rate.  It is a big issue for Telecel as it is a big issue for TelOne and the perpetrators feel that they have no sanction against them because sentences that are currently being provided are very low, especially for those that are operating without licences.  So, it is a big issue to Telecel.  It has been affecting Telecel in a big way and I suppose it does affect all the mobile network providers that are there."

He said in terms of achievements, they are saying they are the cheapest of the networks.  He said they have also reduced all their rates by 40%.

"They now have telecash like other mobile service providers, with a density of about 3 600 approved agents and integrated to all the banks on ZimSwitch, but now ZimSwitch has problems - I am not so sure how that is going to pan out," he said.

"In terms of contribution to employment creation, they have contributed significantly with their roll out of network in the various centres across the whole country.  They still have to spread it across the whole country so that they have a national footprint and a nationwide presence.  Their base stations are also powered on solar and they need to improve."

Source - Byo24News