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Econet blasts new law
The Daily Mirror (Zimbabwe)
October 31, 2006

http://www.zimmirror.co.zw/dailymirror/view_news.cfm?

LEADING mobile phone services provider, Econet Wireless has warned that a new law being introduced by the Ministry of Transport and Communications with effect from tommorrow could force Zimbabwean mobile phone subscribers to pay for international outgoing calls in foreign currency. 

A statutory instrument (SI) was gazetted on March 17 2006 and requires mobile phone companies to route their international traffic through TelOne.

Explaining why the new law will result in people having to pay for international calls in foreign currency, Econet spokesman Sure Kamhunga said: "There will be complete chaos and people will either face black outs on international calls or have to pay in foreign currency. We will have the same problem in telecoms that we currently have in power."

He said that whenever a subscriber on a network in Zimbabwe makes an international call to a subscriber on another network overseas, the Zimbabwe subscriber pays the home network for the call in Zimbabwe dollars, but the home network still has to pay the international network to which the receiving subscriber overseas is connected, what is called a termination rate, and this is charged in US dollars between networks.

On the other hand, when a person in Zimbabwe receives an international call, their home network charges the operator who sent the call in US dollars.

At the end of each month, the operators then exchange invoices for calls made between their customers.

The operator whose customers made the most calls ends up paying out money to the other operator. Operators generally try to get a balance in the flow of traffic between them so that there is no net payout.

"There is a global settlement system in place which is based on the fact that we send out traffic from our customers to networks overseas and we get traffic from those other networks destined to our customers.

" If you divert traffic destined to our customers away from us to come through TelOne then we will be pushed out of the settlement system completely," Kamhunga said.

He added that diverting incoming traffic for customers on mobile networks to come through TelOne’s gateway means that the mobile operators will not have any foreign currency to settle with operators overseas.

"This means they will either be cut off or they will be forced to charge their Zimbabwean customers in foreign currency for international calls.

"TelOne will earn the foreign currency on the incoming calls to other networks, but will pay them in Zimbabwe dollars, but the mobile operators will not be able to pay other networks for international calls made by their customers to those other networks overseas.

"There is no precedence for such an arrangement, and it is dangerous in a country where there is no foreign exchange."

Meanwhile, Econet Wireless CEO Douglas Mboweni said that contrary to perceptions in certain public circles, Econet does not make a lot of money from international calls.

"International incoming calls account for less than 10 percent of the total revenue generated by Econet. We are a public company and this information is available for anyone to see. The Reserve Bank knows exactly how much we make and it’s not that much."What is important about the income we get from international incoming calls is that it is used to off-set the foreign currency obligations we get each time a customer makes an international call.

" If we did not have that off set mechanism our customers would have to pay for international calls in foreign currency," said Mboweni.

The same off set mechanism was used in international roaming.

When Zimbabwe used to have a lot of international visitors who used to roam on local networks the Zimbabwean operators used to earn foreign currency.

This allowed them to charge their customers going overseas roaming costs in Zimbabwe dollars.

When the international visitors dried up the Zimbabwean operators were then forced to charge in foreign currency.

According to Mboweni, this would also be the case if the operators had their international incoming traffic diverted to TelOne.

"Currently making an international call is a right enjoyed by every customer, and we need to keep it that way.

"If we allow this statutory instrument to proceed without amendments then only a privileged few will have access to international calls."

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