Press releases are usually filled with exaggerated self-praise and sometimes some subdued remarks subtly attacking the competition. Not with today’s press release from Econet Wireless which we posted earlier. The company has fired a salvo at CABS, ZimSwitch and Kevin Terry accusing them of using the Bankers Association of Zimbabwe to fight the EcoCash mobile money service.
The attack from Econet is actually a counter attack. The company is apparently responding to news last week that BAZ is lobbying the Reserve Bank of Zimbabwe “to act against Econet Wireless’s reluctance to open up its mobile banking gateway to allow them to transfer money from clients’ bank accounts straight to the beneficiary mobile number.” The herald report last week goes on to says that only CBZ Bank, TN Bank and FBC Bank have access to the giant mobile phone operator’s mobile banking gateway, as Econet seems to take a cautious approach to partnering all the banks.
In response to these reports Econet Wireless Services CEO, Darlington Mandivenga, says in today’s release:
“That is simply not true. We have agreements with most of the banks, and we are currently carrying out physical connections with most of them. We as Econet initiated the process, and we are very keen to get it completed, but it cannot be rushed because it involves accessing bank accounts.”
and that
“Right now I am expecting three major banks to go live within 10 days, because we are almost complete.”
Aim,
“As you know, CABS have been working with ZIMSWITCH to launch a service called Textacash. Since their own customer base is very small compared to the Econet subscriber base of 8 million, they want us to open up our system, so that they can simply spam any of our customers with text messages. We will never allow that because it would not only violate our license, it would be total abuse of customers’ privacy.”
Then, no holds barred;
“He [Kevin Terry] wants to create an impression that this is the position of all banks, but he does not disclose to them that it is his own interest that he is fighting for. If CABS and ZimSwitch want to compete with us, they are free to do so, but they must build a proper system that reaches the rural people in Zimbabwe. They have been there for decades, and never did anything to benefit the masses. This is not about the interests of banks or cell phone companies, it is about providing services to ordinary Zimbabweans,”
And as to how Econet knows all this:
“Our friends in the banking system have told us about his campaigns to try and preserve the status quo in which less than 3% of our people had access to the formal financial system, and where thousands of people had to line up every month for hours just to access their own money, or travel all day just to find a CABS branch. This is not the future.”
In summary, “Hey guys, come fight in the open!”
So far, all this is understandably not easy to comprehend as CABS, ZimSwitch and Terry haven’t offered their side of the story. Well, not officially at least. ZimSwitch is also owned by member banks themselves (including CBZ which was the first to partner Econet ) making it more the harder to understand. We have sought comment from CABS, Kevin Terry and Zimswitch and will post the responses once we get them.
23 comments
It gets more and more interesting… but he does raise a fact in that CABS and Zimswitch or in fact the banks in general failed to reach the unbanked, or at least present a solution that would appeal to my mbuya in Mt Darwin. I wonder how CABS will respond.
I think that is a mute/irrelevant point. It’s all about timing.. all this would not have been possible… a year ago, even for Econet. So the fact that CABS has been around for years does not mean much. If you isolate the “banking” part of it, then you loose the big picture, a lot more facilitators (policy, 3G/4G, prices etc) all have to be in place for this to be a viable route for… anyone. Now the climate is right… and Econet is strategically positioned.. good for them. So his statement “They have been there for decades, and never did anything to benefit the masses” is really a cheap unwarranted jab. On the other hand Econet is right to be cautious and purposeful in dealing with the banks as this is very sensitive infor they will be accessing I just hope it is not putting up excuses to deliberately frustrate the banks
No, he is right. Cabs strategy team slept on the job. there is something called squatting in strategy. This is where you forecast the nest deal changer and then strategically build resources in response to the day the deal changer lands. In CABS case this could have been creating strategic partnerships with the aquivas, broadcom, etc (or looking up a smart guy who can build a virtual network – maybe virgin) and then setting up a network (behind closed doors or on paper) that will reach the unbanked. CABS already has a network(brach or otherwise) and they were ag=head of econet. Unfortunately CABS is run buy old guys using old money (contrast this with the guys who are now BacABC, They new that old guys do not cut in the new world and they capitulated to new crop of leaders, maybe the only zim bank to do that). CABS (read old guard) do not have the insight (and at times risk taking spirit) of young turks. Anyone who has worked in banking and has an idea about technology must really have seen that mobile money is the thing in africa. so simply put, they slept on the job and the have to taste the coffee.
I beg to differ. It is quite relevant. 3/4G had nothing to do with the current mobile banking landscape. It is all SMS/USSD driven, which is very very old technology. Most banks are very slow to adopting even if they had the ideas, they are sluggish and move at the speed of corporate bureaucracy. M-Pesa success should have been a clear warning that things would eventually hit our “shores”. They were unprepared and slumbering
Surely you must know that the banking sector is perceived to be a disservice to general Zimbabwean, even when it comes to providing capital to corporates. Hot on the heels of recent RBZ interventions in light of this. Those are the masses that benefit nothing from these behemoths. Even though I dislike Econet’s “Inspiration to rip our worlds” (as someone once said), I am inclined to support them fully here.
Econet’s core business is its clients in its network. They have every right to protect that. If CABS wants a piece of the pie, why not partner with Telecel or Netone and give us good choice
yes you raise a very interesting point, Ecocash is Econet, we seem to forget the other players in the Industry that is Telecel and NetOne, if CABS/Zimswitch has issues with Ecocash, why not hire innovators that can craft a better solution than ecocash and put it out there.
haha what a joke!! ” so that they can simply spam any of our customers with text messages.” Econet are doing a splendid job of spamming their customers themselves.
I like these wars! they are very health….Cabs, we are waiting for you response!
here is an opportunity for Terry to buy any of the following and really bring it on with econet. he has the following choices, africom, aquiva or the defunct brodacom. Its surprising these so called CEOs of banks never saw this coming. when econet was experimenting with their services some years ago they smiled and had teas with mboweni with no clue at all that some day he would grab all their lunch. Cabs should have bid for a mobile licence when the chance presented itself. That would have been most beneficial to the customers who at the moment are being exploited mercilessly by huge mobile money transfer fees from ecocash. cabs simply needs to buy any on those ailing firms and develop its own mobile e-commerce platform. like carlos slim, masiyiwa will be owning 60% of the country in the next 10years. and that will be make him a god. he is by no means a bad guy, but to give him such big piece of the pie could be detrimental to the health of the nation.
and i heard that Cabs used to own Cabsonline which is now yoafrica. They actually divested from the internet field. need to be corrected there if my facts are wrong
Im always against econet and its costly dealings, but on this lm persuaded to follow econet. Im aware of high charges econet does on its ecocash and sympathetic to claims of monopoly, bt econet got there by delivering services which works.
If compared from the user perspective, which of the two would be available to every user even those in remote areas. It looks like econet hav a winner product which doesnt need internet to work. How can my granma down rural of Mhondoro starts to learn how to use internet so that she can use zimswitch.
“Our people”…seriously Econet????
Sad that most people don’t see the issue here. The issue is about conflict of interest. Period. EcoCash is a TN Bank product – even licensed as such by law. Competition is good – and all products should compete for the better of customers, e.g. Textacash vs EcoCash. But for this to happen, Econet should allow the banks to be able compete on an equal footing (i.e. have fair access to mobile services) not block them. Imagine if I built a road from Mutoko to Harare, and I am am a tomato farmer from Mutoko. When the road is working, I ban all other tomato farmers in Mutoko from using “my road”. If bull what Econet says about “they will spam our subscribers …”. Don’t they know that that same subscriber is also a bank customer & must able to choose between EcoCash and the bank’s mobile financial services freely?
Econet are simply abusing the fact they have the biggest network – so anyone that wants to offer a competing service using their network is blocked. The banks have woken up to this.
In my view Econet spend more than a billion dollars building a network. Business has it that you guard your investment jealously. Thats why people put toll gates on roads and not allow someone to just use the road willy nilly. Go to South Africa and see why their roads are better than ours. Its i because the tll gate system is working. How can a farmer from Mtoko use a road for free. lets agree that Econet invested aggressively in their network. Why sould we want a level playing field now yet someoen has invested 1 billion. Dude this is not the way business works.
Your analogy to toll gates is flawed, as it suggests that solving this impasse would mean Econet charges a premium for accessing those users.
You might be missing my point. I agree with you that you need to protect your investment. But in my analog; if you build a road you can put tollgates, but don’t ban people from using the road. No one has refused to pay for Econet network usage – they want access. Blocking someone access is anti-competitive (restrictive) and most likely illegal – even though I am a lawyer.
Its not the network usage that is of contention. It is the access to clients. Econet is being accused of monopolising and having unfair advantage. How?
1) Econet owns EcoCash, a mobile money solution
2) CABS is starting up a similar project and desperately needs market
3) Econet owns Econet Wireless, with full access to ~8million (divided by 2 😀 ) subscribers
4) CABS wants to be able to market to that 8million-strong subscriber base
5) Econet refuses, justifying by not giving user contact details or the platform to SPAM subscribers with Textcash-related messages. Inadvertently, accused of “unfairly” using its ownership of the network to promote its Ecocash…denying Textcash fair access to those users.
The battle is for the subscribers NOT anything else. In my humble-proud-forensic-style-reasoning
Sorry, meant to say ” .. even though I am NOT lawyer ..”. Back to the subject – I think you are still missing the point. The issue is about access to gateway at Econet by banks so that the banks access their customers who bank with them. See comments from bankers themselves in article here: http://www.techzim.co.zw/2013/02/econet-is-trying-to-confuse-everyone-says-fbcs-mushayavanhu/ . this is were the restrictive behaviour by Econet is. It was so predictable because Econet owns a bank. So they are protecting their bank unfairly from competition by other banks be denying other banks to Econet “carrier” services. And be clearer about this: EcoCash is a TN Bank product, and is regulated by RBZ as such. It is a financial (banking) product. Econet owns TN and so there is a conflict of interest. If you own the mobile network – allow every bank access to your carrier services the same fair access – whether you own the bank or not. This is THE issue. Check the article that mentions what FBC’s Mushayavanhu is saying. It’s so clear.
No it isnt, network usage is secondary. It is the access to the market that is of contention
..And if this New V.Payment systme remained a service for those who know it and it is not so simple to sign up and use THEN Zimswitch and your partners HOKOYO neECOCASH (ePayment Team), I am seeing econet in the process of building something as simple as Paypal for online payments
CABS is owned by old mutual, old mutual has numerous properties scattered all over the country some of which are used by cellular networks to mount their equipment. Theoretically worst case scenario what if old mutual asked the network to remove it’s equipment from all it building over such statements by Mr. Mandivenga… I’m just saying econet must watch whose toes they keep stepping on they may just implode as a group one day
Seriously?
Dude Old Mutual owns shares in Econet. If they sell there will be people to grab those shares! I think Old Mutual properties is making money from the equipment mounted on the buildings! Old Mutual ndeyevarungu iyi havana ivhu muno!
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