Your wishes are coming true, Potraz to license multiple operators to compete with Econet, Liquid etc

We are past debating the benefits of making information and communication more affordable and accessible for the economy. No one is arguing the contrary anymore, not in words, but our actions and policies tell a different story. For a long time Zimbabweans, weary under the exorbitant internet access charges prevailing in the country cried out […] The post Your wishes are coming true, Potraz to license multiple operators to compete with Econet, Liquid etc appeared first on Techzim.

Your wishes are coming true, Potraz to license multiple operators to compete with Econet, Liquid etc

We are past debating the benefits of making information and communication more affordable and accessible for the economy. No one is arguing the contrary anymore, not in words, but our actions and policies tell a different story.

For a long time Zimbabweans, weary under the exorbitant internet access charges prevailing in the country cried out for the powers that be to license new players. The reasoning being that the current players were robbing us blind.

This thinking usually neglects to consider whether we actually have suitors. Zimbabwe is not the easiest economy to operate in, which is the understatement of the year. So, it might just be that we were getting what we were getting because it was what the economy could allow for.

Except we know that’s not the case. Let me jog your memory with this quote from then ICT Minister Supa Mandiwanzira. He let the cat out the bag back in 2016,

If government did not want EcoCash or Econet to be the largest we would have opened our gates for Safaricom to come and operate M-Pesa in this market. We could have allowed MTN to set up in this market and offer the services that Econet offers. And I can assure you they come with a huge pocket to dwarf any player in this market and they have been knocking on our doors. But we have kept them closed because we want to protect them [Econet]. You can read the original article here to get the context of his remarks.

Now, we always have to take statements made by politicians with a little scepticism. However, in that statement the government essentially told us that they indeed blocked foreign players from coming into the market. Whether that was to protect Econet is more debatable. I would argue it was to protect the parastatals that compete in the space.

So, if you ever felt Econet or EcoCash were predatory, you had the government to thank for that. To be fair, there are a lot of legitimate reasons why the government would want to protect our own companies. We all agree with some protectionist stances to some degree.

However, the government seems to have changed course. They are no longer willing to protect Econet or any other local company anymore.

The licensing of multiple players

In the Postal and Telecomminications Regulatory Authority of Zimbabwe’s Q1 report, the Director General says,

On a more positive note, the prospects for effective competition are gaining traction as evidenced by the number of licence applications received for various licences under the converged licensing regime. Accordingly, we envisage a significant increase in the number of operators, which is set to enhance competition in the sector, spurred by a high appetite for innovative digital services. Indeed, the sector is set for increased investment, competition, and innovation, …

The converged licensing regime he is talking about introduced a new licensing model where operators can offer a variety of services under a single license, rather than obtaining separate licenses for each service. This makes it easier for new players to enter the market because the cost of obtaining multiple licences was just too high.

Fun fact – this converged licensing thing kicked off in 2016, around the same time the then ICT minister was telling Econet that they had protected them in the past. That seems to be borne out on this evidence. When Econet, rightly in most people’s opinion, complained about being forced to share infrastructure, that very year the converged licence became a thing.

A number of applicants took advantage of this and the likes of Dolphin Telecom (who we’ll be talking about soon) got their start.

The question then becomes, ‘If the converged licence is not a new thing, how come Potraz says this time around they envisage a significant increase in the number of operators?’

Why now?

We won’t know exactly why now but there are a few factors that jump out. The first is just to acknowledge that although its still Zanu PF in charge, we have different personnel in charge from the highest office to the ICT Minister’s desk. I know it’s mostly the same personnel, just shuffled around, but you get the point.

You can debate how genuine or effective it is, but the ‘Zimbabwe is open for business’ mantra is something that exists now. We know that on the ground, the door is not as open as it should be but a crack is better than nothing.

So, this means we can conclude that the government is no longer actively protecting Econet (again, he probably meant NetOne and Telecel) by blocking foreign or domestic players from entering the arena.

So that’s one side of the puzzle answered for – the government is no longer as protectionist as it was.

Something we will have to consider in a different article is what this means about the government’s thoughts on NetOne and Telecel ever being up to the task. This seems like a quiet admission that Econet needs proper competition and it’s going to have to come from elsewhere.

However, that doesn’t answer why now in 2024 and not before. We don’t know why Potraz is more likely to license operators now.

However, it just might be that there are more applications now. Potraz did say “the prospects for effective competition are gaining traction as evidenced by the number of licence applications received for various licences under the converged licensing regime.”

Why are operators applying now?

We will have to talk to these applicants to know why. Is it that the country’s economic outlook is that bright? Is it that the word finally got out that converged licences are a thing now?

What we know for certain is that there is huge growth potential in digital services. Zimbabwe is still analog to a high degree and there is appetite for digitalisation in the market. We saw how the ICT sector saw this much growth in Q1 2024, mostly driven by internet usage growth:

  • Mobile Network Operators – 65.6%
  • Internet Access Providers – 63.43%

So, who wouldn’t want a piece of that action? It could be that certain factors are just aligning at this point in Zimbabwe for many to take a crack at it. Public awareness, ability to afford and use and strong demand may have attracted many applicants.

Or it could just be that there are new and exciting technologies that allow applicants to enter the space with lower capital. We have talked a lot about Starlink and the low-earth orbit satellite technology which did not exist back when the government was protecting Econet.

Whatever the case, we are excited to see what the new applicants will bring to the table. The sector has sorely needed competition and it looks like we are about to get it.

Also read:

The post Your wishes are coming true, Potraz to license multiple operators to compete with Econet, Liquid etc appeared first on Techzim.

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