Retail news. Semester 1 of 2014 table of contents

Telecel denies rumours of disinvestment in Zimbabwe

By: Samuel Mungadze | 18 Feb 2014

Global telecommunications operator Telecel International has denied rumours that it is pulling out of Zimbabwe.

Telecel Zimbabwe has denied rumours that it is leaving the country. Image: Zimbabwe Election

The company on Monday (17 February) dispelled reports that it was shutting down because it was reluctant to pay the US$137.5m required for a new 20-year licence.

The company owns 60% of Telecel Zimbabwe‚ with the balance owned by Zimbabwean consortium Empowerment Corporation. The latter holds its 40% through a vehicle owned by indigenous groups under the chairmanship of businessman James Makamba. Patrick Zhuwawo‚ a nephew of Zimbabwean President Robert Mugabe‚ was appointed managing director of Empowerment Corporation last year.

Telecel Zimbabwe's 15-year license expired in June last year and was renewed after it promised the Zimbabwean government that it would abide by the country's indigenisation law‚ which states that foreign companies should cede 51% of ownership to black Zimbabweans.

John Swaim chairman and managing director of Telecel International said he had been "puzzled" by recent articles in the southern African press questioning Telecel International's ongoing commitment to its investment in Telecel Zimbabwe.

He said: "The fact is that we have never been more positive about our prospects in Zimbabwe. Following successful completion of the license renewal negotiations last year‚ we are excited by Telecel Zimbabwe's launch of a number of attractive and important initiatives‚ notably the Telecash mobile financial services offer‚ as well as Telecel Business."

Mobile money system

Telecash is a newly-launched mobile money transfer system‚ while Telecel Business provides exclusive mobile solutions‚ including voice and data‚ to local businesses.

Swaim said the company was also continuing with the expansion of its network and retail footprint.

"We are delighted with the progress of the restructuring negotiations, which we are conducting with our long time partner in Telecel Zimbabwe‚ Empowerment Corporation. This will put the company on a solid footing to continue to provide extraordinary service to Zimbabweans while continuing our compliance with Zimbabwean foreign ownership requirements‚" he said.

Makamba said: "All the media reports last week were untrue. We are working together with Telecel International and want to grow the network. This is evidenced by the launch of Telecash. We are in the process of growing the company‚ have strong bonds with our partners and believe in providing good services to the people of Zimbabwe‚" he said.

High costs

The initial reports that the licence may not be renewed appeared in the Mail & Guardian last week‚ with claims that Telecel International was reluctant to inject fresh capital into the business.

High telecommunications licensing fees introduced by Zimbabwe last year were said to be stifling the sector's growth‚ with analysts warning that exorbitant charges‚ aimed at raising more revenue for the cash-strapped Harare government‚ would encourage oligopoly and hinder fair competition.

Three weeks ago Zimbabwe gazetted additional licensing fees. Since January, 24 prospective players have had to pay a new non-refundable application fees of US$160‚000‚ a new annual fee of US$2‚500‚ and US$1‚000 in levies towards Zimbabwe's Universal Services Fund.

The Universal Services Fund is used to promote the principle that all Zimbabweans should have access to communications services. The fund is used to provide infrastructure for services such as Internet and voice‚ for all consumers‚ at just‚ reasonable and affordable rates.

The previous fee was 2% of annual revenue‚ and 0.5% of revenue paid to the fund.

RETAIL NEWS. AUGUST 2013

Zimbabwe internet mobile phone traffic tops SUNDAY MAIL. Saturday, 21 July 2012

Business Editor

The country’s internet traffic conducted through mobile phone devices is the highest in the world at 58,1 percent, raising expectations that the local market could be prime for both m-commerce and e-commerce, an international tele-communications expert has said.

M-commerce is simply described as the buying and selling of goods using hand-held devices, while e-commerce is the buying and selling of goods on the internet or the worldwide web. Mobile telephones have provided a convenient platform for the trading of goods and services.Speaking at a recent workshop on brand strategy in the digital space, which was organised by Ryan Octave Lane, Mr Jonathan Hoehler, the chief technical officer of Starfish, a South African-based firm that specialises in wireless applications, noted that a study by Royal Kingdom had shown that mobile data now constitute about 10 percent of all data traffic globally across the internet.
He added that the growth in mobile phone internet traffic in Africa, particularly in Zimbabwe, is “phenomenal”. “Globally, now, mobile data constitute about 10 percent of all data traffic globally across the internet. And where does Africa sit? At 14,85 percent. So, of all our Internet traffic throughout the entire continent, 14,85 percent of it is mobile data, and the second highest in the world outside Asia, which has two huge markets in China and India.
“In 2010 that figure was about 5,81 percent. That’s impressive growth . . . “And what is so interesting for me is that Zimbabwe, according to the research done by Royal Kingdom, 58,06 percent of all Internet traffic is done by the mobile phone — it’s the highest in the world, which is really, really cool,” said Mr Hoehler.
Most interestingly, according to Mr Hoehler, there was also a study that was done by web browsing giant Opera Mini indicating the most visited sites in Zimbabwe and the commonly used handsets in accessing these sites. The top 10 visited sites included Facebook, Google, Wikipedia, Youtube, Yahoo, BBC, Opera Mini site, The Herald, Twitter, CNN. In addition, the commonly used mobile phones are the Nokia Xpress Music, Samsung E250, all Nokias and LG phones.
It is believed that this pattern provides interesting data for businesses who intend to leverage on the technological boom to market and sell their goods. The advent of the mobile phone has had far-reaching impact on communication on the continent as fixed telephone lines have remained insignificant. Currently, Africa is considered the second biggest mobile market in the world, but the fastest growing mobile market. Estimates indicate that 90 percent of all mobile phones in Africa are mobile phones, while there are 1,1 billion active mobile SIM cards.But most crucially, more than 96 percent of all subscribers on the continent are pre-paid.
Again, Zimbabwe is considered as the fastest-growing market for mobile data usage. Added Mr Hoehler: “In terms of mobile data usage, Zimbabwe is also, out of the countries that were analysed — about 10 countries — the fastest-growing market. That included South Africa, Kenya and Egypt. There is a lot for mobile data and mobile data traffic in Zimbabwe.”
Separately, Ryan Octave Lane executive chairman Dr Brian Sedze said the revolution brought by technology has created two distinct groups: the digital natives, which is made up of those under 20 and are much more conversant with technology and its platforms; and the digital immigrants made up of people usually above 25 who find it difficult to use the new platforms.
“Technology creates and destroys value. So, technology has got an impact on the firms, individuals and society. Today, organisations are just about creating value by collaborating with consumers and co-creating the product. Products are now being marketed by being inclusive with the customer. About 65 percent of Africans access internet over the phone, and a phone is no longer a platform for voice, it is now a platform for commerce.
“Everyone is accessing his internet via a mobile device. You also have to understand to market using social platforms. “However, most organisations do not know where their audiences are. If you are marketing; if your brand has to get good presence, it has got to be on the platform where people spend most of their time,” explained Dr Sedze.
Market watchers note that the local tele-communications boom, especially for mobile telephony, has been occasioned by massive investments by mobile telecommunications companies Econet Wireless Zimbabwe, Telecel Zimbabwe and NetOne. Econet has injected more than $600 million into expansion and plans are already advanced to pour additional resources.
Last week, information gathered suggested that Net*One was going to receive equipment worth $200 million from its Chinese technical partner Huawei Technologies. The laying of fibre-optic cables has also raised expectations that broadband capacity will be enhanced in the short to medium term.