The power and peril of convergence: ‪How Econet went beyond telecoms, and made itself indispensable to our lives

On 5 December 2017, Zimbabwe’s two major Internet Access Providers (IAPs), Liquid Telecom and TelOne, suffered breaks in the fibre optic cables that blacked out 90% of the country from the internet for at least five hours.

By Mike Murenzvi

On 20 July 2019, the country’s largest Mobile Network Operator, Econet Wireless Zimbabwe, suffered severe power supply problems that blacked out its different network services for up to 14 hours. These services included data and access to the nation’s largest mobile money service, EcoCash.

These two events have one thing in common; they show how dependent we are on converged information communications systems, especially those offered by the Econet Group.

Convergence

Technological convergence is a tendency for technologies that were originally quite unrelated to become more closely integrated and even unified as they develop and advance.

When telephone communication was introduced, it had very little to do with banking or anything else short of passing messages and relaying information from one party to another. Internet communications came after that and relied on the telephone systems as the backbone of their architecture.

Now, we have internet communications taking centre stage as the support structure of our daily lives, from banking to medicine, education, entertainment, travel, and social interactions. The internet is life as we know it.

It is in this regard that we see the power and potential of convergence, in that it brings every aspect of our lives into bits and bytes, ones and zeroes. We cannot afford to be off the grid anymore.

Bringing it to the Zimbabwean context, we live in an environment characterised by cash shortages. Monetary transactions take place either through normal banking channels (including internet and mobile banking), or through mobile money solutions offered by the three main Mobile Network Operators (MNOs), Econet, NetOne, and Telecel.

A snapshot of MNO market share is as follows, according to the POTRAZ Q1 2019 report:

Mobile Subscriptions

Service Provider Percentage
Econet 69.7%
NetOne 21.4%
Telecel 8.9%

Internet Access Provision

Service Provider                                 Percentage
Liquid Telecom (Econet Group) 62.2%
TelOne 31.1%
Powertel 3.9%
Dandemutande 2.8%

Mobile Money Subscriptions

Service Provider Percentage
Ecocash (Cassava/Econet) 94.5%
OneMoney (NetOne) 4.7%
TeleCash (Telecel) 0.8%

A history of monopoly

Prior to 1996, the country had one telecommunications provider, the Post and Telecommunications Corporation (PTC). This parastatal held monopoly until the licencing of the State-owned mobile network operator NetOne in 1996. This was followed by the subsequent licencing of Telecel in 1997, and Econet in 1998.

In the year 2000, government broke up the PTC into two distinct companies; TelOne (fixed telecoms), and ZimPost (postal and courier services). This was with the aim of weaning them off the fiscus, and partially privatising the companies in the future.

It is from 1998 onwards that the telecoms monopoly ended and the war for Zimbabweans’ hearts began.

Fast forward to today, and Econet has gone from being the last entrant onto the market to being the largest and most ubiquitous. The company has grown to the level that it has had to spin off its technological services into a now separately listed company, Cassava Smartech. Cassava hosts Steward Bank, EcoCash, EcoSure, and a whole host of other tech-driven enterprises following the path of convergence.

In terms of service and product development, NetOne has consistently led the charge, though with poor results. One such notable product is mobile money, with OneWallet being launched in 2011 as the first mobile money transfer service in the country. This was closely followed by EcoCash in the same year. It should be noted that by then, Econet was already the largest MNO by all measures.

From the statistics above, it’s clear that Econet, and its related companies, is on the path to becoming a monopoly that controls major aspects of our daily lives.

Blackouts

It’s against this background that we go back to the beginning of this article, to the blackouts of services.

In this world where communications must be virtually instant, the selection of a service provider is paramount. No other MNO has infrastructure like that of Econet. For years, NetOne boasted having the “widest coverage”, but rested on its laurels and failed to take heed of the growth of its chief competitor. Telecel, on the other hand, has always been the smaller of the three and contentious ownership wrangles kept any meaningful investment far away from its doors, and this has since led to the majority take-over by the State.

Despite State protection and support services, NetOne and Telecel have failed to entice subscribers to move over to them and gain market share from Econet. This may be seen as a sign of poor strategy execution, significant anti-government sentiment, or simply the invasiveness of Econet in our daily lives.

A snap survey of customer reviews shows a significant number of complaints against the largest service provider but, surprisingly, no corresponding movement in subscribers from the behemoth. Few are prepared to move over to rival service providers. Why? Because of the convergence factor.

It is not enough to be the biggest in one specific service area; be the biggest in all service areas. By inserting itself beyond telecommunications, Econet (and Cassava) has ensured that it is indispensable to our daily lives.

Who runs the world?

This is the age of information and communication. Whoever controls those things, controls their world. And in this case, suffice it to say, Econet runs Zimbabwe. One wonders whether any other industry player, current or new, can ever wrest power from this behemoth.

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The views expressed in this article are the author’s personal opinions and should in no way be interpreted to represent the views of any organisations that the he is associated or connected with. This article was first published by the NewZWire