As Starlink makes its grand entrance into Zimbabwe’s telecommunications arena, it’s easy to get caught up in the excitement. The promise of high-speed internet at seemingly affordable prices has many Zimbabweans cheering – and simultaneously casting stones at Econet, our homegrown telecom giant. But before we rush to judgement, let’s take a step back and examine the complex landscape that Econet has been navigating since its formation.
Having been in this space for years I’ve come to see a lot. Though I was still jumping durawalls bunking school at Churchill Boys High then Morgan High School we are all aware that Econet were not handed their operating licence on a silver platter. But some may argue that that was aeons ago and such shouldn’t affect their operations of the day. You may have seen the articles that I’ve rolled out recently on Starlink but this is an attempt at playing Devil’s Advocate and looking at things differently.
The Licensing Labyrinth: A $137 Million Hurdle
Let’s start with the elephant in the room – licensing fees. Econet didn’t just waltz into the Zimbabwean market; they had to pay a staggering US$137.5 million for a 20-year licence from POTRAZ. That’s not pocket change for anyone, folks. To put this into perspective, Starlink’s licensing fees in Zimbabwe are reported to be around US$575,000. That’s a difference of almost US$137 million! Yes you may argue that they are for different types of licences, one was for a mobile network, while the other is for an Internet Services Provider, but come on, let’s agree that everything has gone “internet based” now, and if it hasn’t, it soon will.
Now imagine trying to recoup that investment while still trying to keep your services affordable. It’s like trying to run a marathon with a boulder strapped to your back.
I remember chatting with an Econet executive a few years back about their infrastructure investments. He quipped, “We’re basically building roads in the sky, but instead of toll gates, we have to rely on data bundles.” That licensing fee isn’t just a one-time cost; it’s a weight that Econet carries with every decision they make I’m sure.
The Interconnection Conundrum: A Game of Financial Hot Potato
Now, let’s talk about interconnection fees. In an ideal world, telecom operators would seamlessly settle these fees amongst themselves, ensuring a smooth flow of communication across networks. But in Zimbabwe? It’s more like a game of financial hot potato.
Econet has often found itself holding the short end of the stick, with other operators either neglecting or failing to settle their interconnection debts. It’s like hosting a dinner party where half the guests eat their fill and then conveniently “forget” their wallets. Econet ends up footing the bill, which inevitably impacts their pricing strategy.
The ZiG Dilemma: A Currency Catch-22
Here’s where things get really sticky. While Starlink can happily charge in USD, Econet is not only forced to accept payment in ZiG but also at the official bank rate! If you haven’t been living under a rock in Zimbabwe you’d know that with the street rate often double the official rate, Econet finds itself in a currency quagmire.
Imagine you’re selling apples. You buy them for $1 each, but you’re forced to sell them for the equivalent of 50 cents. That’s essentially what Econet faces when trying to source USD to settle external invoices. It’s a financial tightrope walk that would make even the most seasoned acrobat nervous.
ZESA’s Disappearing Act: The Power Predicament
Ah, ZESA. Our old friend who loves to play hide and seek with the electricity. While Starlink’s satellites orbit blissfully above our power woes, Econet has to grapple with the harsh realities on the ground.
Picture this: You’re running a network that spans the entire country. Suddenly, the power goes out – not for an hour or two, but sometimes for up to 24 hours at a stretch. What do you do? You fire up generators to keep those base stations humming. But generators need fuel, and fuel costs money – lots of it.
I once visited an Econet base station during a particularly brutal bout of load shedding. The site manager, gesturing to the humming generator, said, “This beast drinks more diesel in a day than most cars do in a week.” It’s a necessary expense, but one that inevitably trickles down to the consumer.
The Foreign Currency Tango: A Dance of Desperation
Here’s another wrinkle in Econet’s operations that often goes unnoticed: the struggle to access foreign currency for critical imports. While Starlink can operate largely from afar, Econet needs to constantly import equipment, software licences, and expertise to keep its network up to date.
But accessing forex in Zimbabwe? That’s about as easy as finding a needle in a haystack – while blindfolded. The official channels are often dry, probably forcing companies like Econet to resort to the “alternative market”, where rates are significantly higher. This will not only increase their operational costs but also puts them in a precarious legal position.
I recall a conversation with an Econet supplier who lamented, “We’re caught between a rock and a hard place. We need to import to keep the network running, but the forex just isn’t there. It’s like trying to bake bread without flour.”
The Regulatory Tightrope: Walking a Fine Line
Let’s not forget the regulatory environment that Econet has to navigate. While Starlink enters the market with relatively few strings attached, Econet operates under intense scrutiny from various government bodies.
From POTRAZ’s quality of service requirements to the Reserve Bank’s currency regulations, Econet has to constantly adjust its operations to stay compliant. It’s like trying to play a game of chess where the rules change every few moves.
I’ve sat in on industry meetings where telecom executives grappled with new regulations. The frustration was palpable. One exec summed it up nicely: “We’re expected to provide world-class service with one hand tied behind our back and a blindfold on.”
The Infrastructure Investment: Building the Digital Backbone
Here’s something that often gets overlooked in these discussions: the sheer scale of infrastructure investment that Econet has made over the years. While Starlink can beam internet from space, Econet has had to physically build out a network across Zimbabwe’s varied terrain.
From remote rural areas to bustling urban centres, Econet has laid fibre, erected towers and maintained a vast network of base stations. This isn’t just a one-time cost; it requires constant maintenance and upgrades.
I’ve trekked to some of Econet’s more remote base stations, and let me tell you, getting equipment to these places is no small feat. It’s a testament to their commitment to connecting all of Zimbabwe, not just the easy-to-reach areas.
The Way Forward: A Balancing Act
So, where does this leave us? As Starlink enters the ring, it’s easy to cast Econet as the villain, the lumbering giant unwilling to change. But the reality is far more complex. Econet is fighting with one hand tied behind its back, facing challenges that Starlink simply doesn’t or won’t have to contend with.
Does this mean Econet is perfect? Far from it. There’s always room for improvement, and healthy competition from players like Starlink could be just the push needed to drive innovation and better pricing.
But as we embrace the new, let’s not forget the role that companies like Econet have played in building Zimbabwe’s digital infrastructure. They’ve been in the trenches, dealing with our unique challenges, for years.
The entry of Starlink is exciting, no doubt. But rather than pitting one against the other, perhaps we should be asking how both can coexist and complement each other. How can we create a regulatory environment that fosters fair competition while acknowledging the investments made by existing players?
As Zimbabwe steps into this new era of connectivity, it’s crucial that we approach it with nuance and understanding. The telecom landscape is complex, and simplistic comparisons do no one any favours.
So the next time you’re tempted to bash Econet (or any local telecom provider) in favour of Starlink, remember – they’re not just competing on speed and price. They’re navigating a complex web of local challenges that no satellite can beam away.
The future of Zimbabwe’s internet is bright, but it’s going to take more than just new players to realise its full potential. It’s going to take a collaborative effort from providers, regulators, and users alike. And who knows? Maybe this new competition will be the catalyst for positive change across the board.
In the meantime, I’ll be here, watching this space closely and keeping you updated on every twist and turn in Zimbabwe’s evolving digital landscape. Because in this fast-paced world of tech, the only constant is change – and I wouldn’t have it any other way.
69 comments
True we can’t blame Econet alone. The most culprit is not Econet but Zimbabwean government for internet to be more expensive. Why would we pay 10% Excise duty? Government is already receiving a lot of money from these telcos businesses in the way of 15% VAT; 25.5% Income Tax; PAYE; 2% IMT; and US$6.85 million per year operating license compared to our neighbor Zambia pay US$100 000 per year which is also a land locked country. I think government will soon ban individual to buy starlink kit direct cause there are many resellers given that license…
You forgot to tell us the cost of setting up satellites by SpaceX,you only started with licensing fees.Setting up satellites might not be as cheap as you would like us to believe.Its the volumes which may make Starlink cheap after all.What about maintaining the satellites?Do you have an idea about those?
Trust me the costs for Starlink are minimal as it is projected to start generating profits soon,It’s projected to earn around 12 Billion a year after launch costs totalling around 10 billion. The administrative costs are insignificant in this scope. Also Starlink is backed by the US government. It was given around USD800 million by the US government.I don’t think we can compare Starlink’s troubles with Zimbabwean ISP troubles, they are galaxies apart.
We don’t care. Econet should innovate or die. They stole from us for too long.
True.Enough is enough.They cant continue to short chsnge us .Shape up or ship out.
thank you
This is a very fair analysis of what’s happening on the landscape. Whilst Econet has it’s flows on service provisions .the turf has not been easy for these guys to navigate.
Econet is a ruthless capitalist company that doesn’t care for the poverty stricken majority of Zimbabwean. Why people are celebrating the coming of starlink, it because they see they see it as way of punish this parasitic ruthlessness company so called econet. Econet has been ruthlessly taking advantage of the poor. They make huge profits at the disadvantage of poor. No matter how hard you try to justify your injustice, people will continue celebrating the coming of starlink and the fall of econet
Wait a minute, do you think Econet will fall?
Econet is a business not a government, so this poor and rich diatribe is meant for those that provide social welfare , a business is set up to make profit , gvt takes tax from the business to then help the poor and not econet !
Bring facts not just statements and chants.
I still think the element of profiteering was there. You feel it whenever you travelled across the borders to Zambia, SA or Botswana.
Arguments with ppl like u can damage ones brain cells . Like bring facts don’t spout nonsense. Props to econet for surviving this long . I think ur just poor bro and can’t afford the data thats why .kkkk
Besides adii kungoshandisa NetOne or Telecel if he/she feels Econet is taking advantage of him.
Yeah there is a group of people who feel like crying always yet there are other alternatives.
Ko unotikireyi vanhu for their opinions? Who has damaged brains now?
Exactly
Very well said!. Most people do.not understand the issues you have so well explained.
It’s really disgusting to see how a local company is squeezed, and made to jump through all sorts of hoops, but a foreign company gets red carpet treatment and the government happily signs a Rudd Concession like agreement. And people cheer wildly.
Only – Econet didn’t kill Telone or Netone, they died (if they did) of their own incompetencies. They could have been co-existing, each with their own clientele, and their own piece of the cake – just like in all other countries
TelOne was killed by Econet. After constructing & installing telephone poles all over Zimbabwe, then boom,Econet comes in with new technology in the form of base stations instead of telephone lines. This was morden infrastructure indeed, it was very efficient & very convenient as these base stations managed to service the great length of Zimbabwe. So TelOne died because people chose convenience. In the same way Econet killed TelOne, Starlink shall bury Econet.
Slow decision making and bureaucracy is why Econet, instead of the then PTC, which is now the Telone, started with the wireless network which has grown to one of the greatest in the world. The founder of Econet, Sir Strive Masiyiwa was a mere engineer at PTC where management refused to take Masiyiwa’s suggestion for PTC to start a mobile network section. Since mobile networking was still in its infancy, the old people in management felt it would not succeed in the small country and too risky for their comfortable jobs. With a vision that a wireless network was possible in Zimbabwe, Masiyiwa left the cosy job as a telecommunications engineer at PTC and, with Christian faith, sacrificed all he owned to start Econet.
Maybe the present management want to erase the mistake of their foremanagers of ignoring Strive by acknowledging Elon.
Captivating article.
I have often understood or tried to understand econet prices when it comes to it’s tarrifs,Zim is a difficult space to operate in but I will never forgive them for shortchanging us. How many times were people crying about buying data bundles which never made it to their fons or never worked until they expired. How many times were people complaining about bundles that seemed to deplete as if they were on steroids. All these and more fell on deaf ears as if we were not facing the same currency woes or zesa woes in Zim. Charge ur price econet even if it is expensive but give us value for our money that is all we were asking for. The environment is harsh for everyone not just econet but everyone in general.
You should have started with retrofit the company that gave birth to econet and what happened to it will show you the problems with the awarding of the licence. Econet did not empower citizens but was elitist and empowered whites at the expense of black business.
Assuming the present trend were vendors sell lines and airtime began 25 years ago. How many people would have been empowered so monopolies cry Croc tears. Were did mascom funding come from did it get approved by the reserve Bank or was it an illegal transaction
Bro have u ever called customer support. Like i do it to the point one guy already new for data problems. But the point is they refund you like they give u i think 2 to 3 gigs of data so wats the problem here. I think most of u just like to complain without taking action i bet u have never call customer support
Maybe its the right time for econet to change its attitude towards its customers
@techzim takudawo ma results ebhora kana zvichiita totoda app rako
Saka totenga dhata re $45 richigumira pa 5Mbps (NOT MB) tichisiya re 30 dhombi rinosvika zve 100Mbps nekuti Econet yakawomerwa? Vakabatanidza ma 10c aye avanotibhadharisa ekutarisa balance pa EcoCash app metsi dzavo dzinonobhalanca.
PS: Brown envelope writing inowoneka
Starlink is not as important as you would want it to seem at techzim, econet has 10 million + users vane ma sim e econet, starlink haina kana sim 1, starlink haina kusiyana ne vsat i technology yekumusha, liquid has fiber, the longest privately owned in Africa, even muridzi we starlink needs fiber & 5g for his self driving Tesla’s, so lets get back to thinking critically and stop with the starlink madness
Point noted but let’s look at the time Econet has been in play supplying the Zimbabwean citizens mobile services. Since 1998, which is 26 years. Internet since 2010. The monopolized the market for over 25 years they have the largest subscriber database in Zimbabwe boasting over 5 million subscribers. If they rack in an average of 25c a month from each subscriber they make upwards of 1.25 million a month. That’s and average of 15 million a year. Before we talk about the fees they collect from balance requests etc. This is at minimal operating capacity. As much as they are the hero for Zim they became our own villain charging exorbitant prices as the best ISP. Fast forward to 2024 starlink aims for Zimbabwe then they start scurrying around trying to provide better prices. The debacle won’t end well, in a few months they’ll lose 30 to 40 % of their home isp, in the following 12 months I project it at 60 % in total. They will have to survive off Mobile ISP but that will soon be done for as starlink is planning a mobile ISP for 2025. They are dying a quick death.
On a serious note, it’s only Zim where you are charged a fee to check your balance. Outrageous and no justification whatsoever. Unforgivable.
Magetsi anodhura wangu
Zimbabwe is just a country full of dumb politicians they are allergic to progress they think progress is a failure the government is the problem econet pay too much fees to potraz that’s not fair
dai zvaitobvisa Starlink yaita zvema bank futi, the charges haa no
Do not understand much of this tesh jargon ,i am happy for Econet to fight for tts rightful position in our country
Stay in the batle we are for youDo not understand much of this jargon ,but am100% in saport of Econet ,knowing the history of how it came to life
,Also give credit to Net One aluta continua
This is where gvt allegiance to protecting local bznesses comes..we can’t have regulations cast in concrete in the face of ever changing technologies.. technology is meant to make products cheaper, more affordable and more efficient to produce so must taxes and levies be lowered in response to those changes. Surely why must the gvt get stuck on insisting a 137.5mil payement plus all those levies in this day and age. Gvt must simply Reduce those levies and make econet competitive and offer cheaper data compared to starlink
We don’t care about what you went thru – Starlink is the BEST DEAL IN TOWN.You ripped us for years providing POOR NETWORK.Why is it all of a sudden UNLIMITED INTERNET is now being offered @ 15 US on your trial ???Couldn’t you have lowered prices for UNLIMITED INTERNET before STARLINK entry???We didn’t hear you crying when you humbled NetOne & Telecel – now you’re crying foul?What is Econet GOOD at besides ripping people of whilst providing poor service? I bet Econet was the one behind STARLINK delayed entry.Be ready to share subscribers with Starlink😂😂😂😂
The two won’t share Subscribers. Econet will still live a healthy life even with Starlink in the zone
Econet is mobile & portable. Though you can go mobile with Starlink, it’s not portable so rather we can say, Starlink is Fixed
As long as you’re a Zimbo, one who’s heavily mobile find comfort in Econet or a Mobile Operator
You are very logical stephen, people hear have gone mad, thats a fact, starlink is there mostly to save remote areas kusina fiber, fiber is a superior technology that starlink, so is 5G, thought this site in vanhu vari technical, seems its just full of self hating writers and readers,
How much have you been paid for this PR MR William??????????????????Whatever you say doenst change shiittt…we are moving with the times….Tora mari yangu mkoma Elon….Econet ngaimbomira mbichana we will continue using it for phone calls only!!!!!!!!!!!!!!!
Defending Econet won’t help, it’s like defending Nokia against the emergence of Android. If Econet doesn’t innovate and give services at an affordable price, they will be history like Nokia in the future.
I’m just wondering how Starlink’s direct to cell will affect the likes of Econet. I mean all that investment in the ground based network could just be for nothing.Only time will tell.
Imagine just buying a phone, then go kumusha kusina Network, scan and connect to a satellite woto chaya runhare 😂😂😂
Sounds like a pro Econet sponsored article , you can’t fight innovation by defending an outdated business model and network infrastructure, where were these concerns when landlines were replaced by mobile. Any business can be disrupted , what remains key is treating customers fairly and proper pricing strategy , Econet has been trimming customers for many years and declaring profits for many years.
Econet is a business so unfortunately it has to adapt and innovate to survive. It’s a cut throat industry. ISPs everywhere are under pressure, balance sheets are not looking good. Although the article makes some valid points. Econet shareholders have reaped the rewards of their investment. There is simply no room for sentiment in the real world because people want solutions. local or international, they have to contend with new challenges that’s just how it is. Personally I have no love lost for a billion dollar capitalist enterprise. I will personally choose starlink because it aligns with my needs. Nothing personal.
Techzim, you really need to stop simping for Econet. $137 million over 20 years is just under 571k a month. We haven’t forgotten paying USD300 for a line. We understand you need to protect the access you get to “discuss with Econet executives”, but there is a cost to your impartiality. The day of reckoning for the miniscule bandwidth they have been buying and selling to us at a premium has come. They had their time. Telone has survived newer, better competition. They had to accept the new reality and Econet will too. We as their customers will not forgive.
😂😂😂😂😂😂😂 it’s about access. Mkoma Chui thought he could hide behind a small Econet bashing here and there. This is PR piece straight up. Unfortunately, tbose who actually read these articles have moved to Starlink. Dai Econet yatotanga maJingles sana “Takashinga Takashinga …..”
I think as Africans we should try inventing/innovating our own technology just like China is doing, this way we will have own cheaper equipment than having to source them from other continents at higher price
Thanks so much, fair well researched article. Well done.
So tobhadhara 417 usd for 50Mbps tichisiya 100Mbps for 30 usd because Econet are going thru a lot never itai mega 😂
While you have a point on the tricky business landscape that econet was on, i still wouldn’t feel sorry for them if they fall behind. They don’t deserve our pity. For so long they’ve been ruthlessly short changing poor customers to make up for those challenges you mentioned. But two wrongs don’t make a right. What good is it to play devil’s advocate for an entity that mercilessly used unfair capitalistic tactics to squeeze as much of our hard earned dollars as they could, while giving us less and less of what we paid for, simply because “it’s a home grown company”. They already forfeited their advantage of having support from the masses because of how abusive they’ve been. If you think econet had the slightest concern about you as a consumer, I’m afraid you’d be deluded. They’re in it for the money and couldn’t care less how you feel as a consumer.
You are a very good analyst. The world is changing too fast and it needs people who think fast. Very soon you will be able to bank your money in a foreign bank, and easily transact internationally without having to travel. Zimbabwe banks with their high banking charges will be forced to close because no one will bank locally.
Hanzi if you make it New York….
If you make it in Zimbabwe, you have my respect. ✊
Isusu vema pay as you go bundle e $1 tinokwanakwana papi in the scheme of things
To assume that the current internet takes lessons from virginia Mary is misleading. That a dark world exists undercover of that web has made some “Divine” opposite force to take the “total destruction is the only solution” stance. Who knows all dark satellites could be replaced by out of this world Starlink Satellite with it’s unhackable Quantum Financial System for instance.
I have a question: Did Netone and Telecel pay for their operating licenses? If not, why and how are they able to continue operating?
Their licencing fees where at par with their charges then so its a time difference only ,i remember paying 10mbs for 1usd so i think it was fair that they charged them that mich
You are very logical stephen, people hear have gone mad, thats a fact, starlink is there mostly to save remote areas kusina fiber, fiber is a superior technology that starlink, so is 5G, thought this site in vanhu vari technical, seems its just full of self hating writers and readers,
The amount of money that econet used to charge for sim cards, the amount they charged for phone calls and SMSs when the economy first dollarized and the amount they charged for GPRS internet when they first introduced in 2010 is more than enough reason to vilify Econet for shortchanging, overpricing and exploiting the customers. Stop defending them. It’s not like you don’t know how much $50 will get you in terms of private WiFi. Don’t you ever ever defend them again.
A very balanced critique. I guess there is still room for the other players because they say the Starlink technology still has constraints in servicing dense areas like the volumes in urban areas like Harare etc. Casualties will be there whether it be targeted or by default and the struggle continues. We sit and watch and hope for the best.
Use Econet if you like. I have had enough,at least let me try something different. What a greedy folk!
While Starlink can beam internet from space, why can’t Econet do the same and do away with laying Fibre?
Fiber is better than satellite, its faster, more dependable, satellite internet has always been there for the past 20+ years, dai maifamba maiiona kumusha, starlink is there to serve the remote areas kusina the fibre infrastructure, even ku America they use fibre and 5G, you don’t hear them talking about starlink because its a technology for the remote, kusina fiber nema cell sites, kungoti pano varikutengesa starlink equipment thats why they are not being technical and honest
But pa cost manje apo, ndipo pane yese
Let’s look at some facts about how Econet has ripped benefits from Zimbabweans: Just a brief period from 2010 to 2013 Econet made a profit of over $553 Million. So please do not mention anything about the licence cost as if it has not been covered over and above.( Source: Econet Wireless Annual Report 2013).
Do you remember Econet selling their sim cards for $100 USD? I bought mine for $38-00 in February 2009. Right now Econet boasts of having 16.8 million subscribers, do the math and tell me how much that is.
Do you remember the Kwese saga? Yes people bought the decoders and antennas like hot cakes, and later realized nothing from all that. How much was the Kwese setup kit by the way? $49-00 and how many people bought these kits? It only operated for 18 months. The beneficiary was Econet again.
The way you wrote your article seems as if Econet is an individual whom you pity to be in a predicament, but no, it is a multimillion dollar entity, who is expected to evolve in face of competition. Why should it be our concern as customers to be told about Zesa’s disappearing act?
So if the price of porridge goes up do you have to explain that to your 6 months infant that baby you can’t have porridge because it’s cost has gone up? As a company it is it’s mandate to become innovative and adapt to the situation. Starlink is not even an MNO, it’s just an ISP, so why cry foul for such a massive Holdings group? Actually Econet subsidiary, Liquid is supposed to be the one in the said competition. We end up wondering if you are being paid by Econet to write on their behalf. Be impartial and use facts, not comments from Econet Executives, rather take information from their financial statements.
How about Econet should have been innovative enough to go international with a new product offer, ahead of Starlink/SpaceX? And deploy it’s Technology in the USA and UK etc? Technology is evolving and nobody can stop that train, especially under the cries of fair/unfair competition, regardless of the previous investments already done. If a giant mobile network operator will be affected this much, what more the smaller minority player?
You make it sound like starlink send rockets with satellites for free into space. Do an article about the cost of building rockets and what Elon Musky sacrificed to be able to build rockets and send satellites to space. Econet should innovative and make their data competitively priced.