Why Zimbabwe Blocked MTN And Safaricom From Entering Local Market

Why Zimbabwe Blocked MTN And Safaricom From Entering Local Market

The Zimbabwean government deliberately blocked the entry of South Africa’s MTN Group and Kenya’s Safaricom into the nation’s telecoms space in order to shield local operators from bigger international firms and promote their organic growth.

MTN has its presence in 22 African countries, while Safaricom is the biggest communication company in East and Central Africa.

“I can assure you that they come with huge pockets to dwarf any player in this market. They have been knocking on our doors but we have kept them closed because we want to protect them (local mobile operators),” Supa Mandiwanzira, the ICT minister was quoted by the source.

The Southern Africa nation has three mobile networks — Econet, NetOne and Telecel. The government owns controlling shares in Telecel and NetOne.

Mobile phones have over the years become the simplest and cheapest mode of communication in Zimbabwe, a country characterized by a lack of infrastructure, limited electricity supply and poor roads.

Mandiwanzira said refusal by Econet to share its money transfer service, EcoCash, with other local players in the market could in future force the government to granted MTN and Safaricom operating licenses since it did not wish to see one company monopolize the market.

EcoCash has six million customers and controls a large chunk of the Zimbabwean market, according to the source.

Natalia Jabangwe, EcoCash general manager, defended the decision saying that the firm has invested a lot into the infrastructure.

“It takes a lot to be able to grow a mobile money payments business… They will come a time when it will be inevitable for the distribution network to be shared but I think we must appreciate that has a  lot has gone into building the distribution network,” Jabangwe said.

The Zimbabwean government has plans to share infrastructure owned by its two telcos and TelOne, a fixed telecoms operator.

A shared infrastructure will reduce network expansion costs for operators and lead to reduced tariffs for subscribers across the nation.

Zimbabwe has about 19.5 million mobile subscribers, with Econet Wireless controlling over 50 percent of the total market share, News Day reported.