We’ve been hearing rumours over the past week that Telecontract was threatening to disconnect all ZOL clients if ZOL didn’t let them bill customers directly. The rumour was confirmed yesterday when ZOL issued a press statement to explain what was going on in this troubled marriage.
Some background
The arrangement that has been working for the two telcos until recently, was that ZOL would sign up customers for the upstream internet service they have and use Telecontract for the last mile connection to the client. Only ZOL was visible to the customers. Telecontract would just play the behind-the-scenes-last-mile-connectivity role. Each month, Telecontract would bill ZOL for all the clients using the Telecontract network, which monies ZOL would pay. ZOL factored in this last mile network component in their prices to the customer and all was well.
In fact, this was good for Telecontract because ZOL would do all the dirty work to get the clients, and after the client was signed up, Telecontract didn’t have to deal with the administrative burden of billing each customer separately.
The problem
All was well indeed until some few months ago. According to ZOL, Telecontract for some reason (one we’re still to establish) felt they were not getting what was due to them for their services and started demanding more money for the connections. This ZOL said ‘No’ to, and Telecontract proposed to start billing ZOL customers directly. Again ZOL wouldn’t have this ‘customer stealing’ scheme and started to sense imminent fallout with Telecontract. ZOL immediately started courting other local network providers and began moving customers gradually.
This obviously didn’t happen fast enough. The first sudden disconnection happened on 27 Feb over unpaid connection fees. To cushion the customers against the misunderstanding ZOL immediately paid Telecontract the demanded amount and customers got reconnected. This happened again on 15 March and this time ZOL sought arbitration from the telecoms regulatory body POTRAZ. POTRAZ asked to Telecontract to reconnect the customers, which they did.
The last straw was last week’s disconnection on Thursday. This time ZOL decided to wash the linen in public! We don’t know yet if the 200 customers have been disconnected, or, if they’re being moved, which access provider is taking them up.
We tried today to get in touch with Telecontract but their legal advisor, Maenzanise (responsible for such matters) was said to be in meetings. He didn’t get back to us despite leaving several messages. Without the Telecontract side of the story, it’s hard to determine what exactly is going on but whatever the truth, disconnecting over 200 customers without any advance notice is really extreme.
Into the future
Hopefully ZOL can reconnect the customers before they run out of patience. Specials like the current free ZOL VSAT installation, and opening up ZOL Wi-Fi hotspots for free access to affected clients definitely show how serious ZOL is about address the problem.
That said, this is not good for ZOL especially at a time when Africom, Powertel and others are working to get high speed Internet directly to consumers and business. ZOL is reputed for exceptional service delivery, but this episode here has the potential to bite a signification chunk of that away. Business will not care whose fault it was. At the end of the day, all customers want is a connection, and one that works. An ISP’s issues with a last mile wholesaler or an upstream internet provider, no-matter how genuine should be transparent to customers.
With the current changes in the industry, ZOL, and other ISPs with the same business model, might want to re-strategise to ‘move with the cheese’. Else they find themselves irrelevant to consumers and fall victim to partners wanting to ‘steal’ their customers right before their very eyes.
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