Zimbabwe’s rival mobile operators, Econet and NetOne, are locked in a bitter dispute over outstanding call termination fees, which has lead to the cancellation of cross network calls between the networks .
Econet, the biggest telco in Zimbabwe with 6.4 million subscribers, said on Thursday that it had terminated interconnection services between its subscribers and those on NetOne’s network.
NetOne, which has almost 1.5 million subscribers, is said to owe Econet about $20 million in interconnection fees.
Under an interconnection agreement, NetOne is supposed to forward 7 cents from each call a NetOne subscriber makes to an Econet network, while Econet is also bound to remit 7 cents to NetOne for cross network calls.
“NetOne has unequivocally repudiated its interconnection agreement with Econet. As a direct result of the repudiation, Econet regrets that from Thursday 23 August 2012, it will have no choice but to terminate all interconnection services it was providing to NetOne under the repudiated agreement,” said Econet Thursday morning.
The effect of this is that “no calls will be possible from NetOne” and terminating directly onto Econet. Calls originating from Econet and terminating on NetOne have also been affected.
No official comment was immediately available from NetOne, but a highly placed source at the company told ITWeb Africa that NetOne was cash strapped and unable to pay the outstanding termination and interconnection fees.
“If NetOne had the money, it would pay. This dispute has been in the making for a long time,” he said.
It is normal practice in other countries too, for telecommunications companies to interconnect to one another. This is however done under an agreement, which sets out a mutually agreed cost for the termination of calls between the operators.
“These rates are 7 cents per minute for a domestic call and 20 cents per minute for international calls,” said Econet in its statement.
Cross network calls between Econet and NetOne cost 23 cents per minute.
Econet says “NetOne has failed to remit the monthly fees due to Econet…. The failure to pass on an amount collected from its subscribers is not only irresponsible but also borders on dishonesty to Econet and NetOne subscribers.”
Sources privy to developments around the issue confirmed on Thursday that Econet lobbied the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) and government ministries to pressure NetOne to honour the outstanding interconnection and call termination fees.
However, these efforts, according to Econet, have failed to yield any positive results leading to the recovery of the amount that it is owed.
Last year, Econet’s lawyers summoned NetOne to pay $9 334 938 which was outstanding at the time although the matter is still pending in a Zimbabwean court. However, in June this year, NetOne “advised Econet that insofar as it was concerned, there was no interconnection agreement” between the two operators and that as a result of this, NetOne did not owe Econet any amount.
“NetOne has no obligations due to Econet with regards to interconnection fees because it has no interconnection agreement in place with yourselves,” NetOne is said to have written to Econet in a letter dated August 3 2012.
By the time of writing, it was not possible to make a call across NetOne and Econet networks. There are concerns among subscribers that the dispute over interconnection fees between NetOne and Econet was prejudicing subscribers.
Analysts and telecommunications sector players urged the regulator to find a solution to the impasse through enforcing interconnection agreements and to force the companies to adhere to the agreements.
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