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law threatens Econet
Manyukwe, The Zimbabwe Independent
October 27, 2006
THE government intends
to introduce legislation with effect from next week which is likely
to cripple the operations of cellular phone company Econet through
termination rates for international traffic that favour the state-owned
The government has notified
mobile phone operators that Statutory Instrument 70/06 will be operational
beginning November 1 in a development that will also have a negative
impact on Telecel as it will hand Tel*One a monopoly over foreign
The Postal and Telecommunications
Regulatory Authority of Zimbabwe (Potraz) director general Cuthbert
Chidoori yesterday could not comment on the statutory instrument,
only saying: "I will come back to you."
The introduction of the
law shows government's determination to squeeze private players
out of business as a similar move, through statutory instrument
18/04, instructing that Tel*One was to provide all international
telecommunications services with effect from January 31 2004, was
set aside by the High Court.
At that time Econet Wireless
sought recourse in the courts against the law that also required
mobile operators and Internet providers to use the government-owned
earth station in Mazowe amid fears that government intended to increase
its eavesdropping on international communications.
The statutory instruments
are in violation of a 1998 Supreme Court ruling that ushered in
a new era in communications by ending the state's monopoly
through granting licences to private operators.
The government recently
gazetted the Interception of Communications Bill that seeks to intercept
private communications in a reversal of a 2004 Supreme Court ruling
which declared unconstitutional Sections 98 and 103 of the Posts
and Telecommunications (PTC) Act as they violated Section 20 of
the constitution of Zimbabwe.
The latest statutory
instrument will see traffic being routed through Tel*One that is
charging the lowest tariffs of 15 US cents against the private mobile
operators who are required to charge 20 US cents.
The effect of the statutory
instrument is that private players would be prejudiced of foreign
currency as Tel*One would declare all calls passing through it as
its own and the private companies would get local termination rates
in local currency. Econet and Telecel would however be required
to pay for outgoing
traffic in foreign currency although they would not be earning hard
currency from incoming calls.
The move will also result
in Zimbabwe losing foreign currency due to Tel*One's low rates
that have since been condemned by Reserve Bank governor Gideon Gono.
In his December 2003
monetary policy statement Gono said: "the monetary policy recommendation
is that the minimum termination rate be set at between 20 US cents
and 25 US cents."
He said between 2000
and 2002, Zimbabwe lost over US$75 million due to the low termination
rates for incoming traffic.
"Zimbabwe is losing
millions of foreign currency earnings through sub-economic termination
rates for incoming international traffic . . . this results in Zimbabwe
always being a net payer of scarce foreign currency," Gono
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