Econet loses tariff appeal

Fidelis Munyoro Chief Court Reporter
Mobile telecommunication giant Econet Wireless was last Friday forced to eat a humble pie when the Supreme Court quizzed how its lawyers filed a hopeless case as an appeal.

Econet had sought to challenge a regulatory determination as issued by the Postal and Telecommunications Regulatory Authority of Zimbabwe on October 16 2014, ordering a reduction in mobile telephone tariffs by all operators in the country.

Mobile call tariffs are about 30 percent higher than what service providers should charge according to a telecommunications cost modelling study done by Potraz. Currently pegged between 23 cents and 25 cents, the rates will be lowered to 15 cents per minute, a move which Econet has strenuously tried to fight as they said it will render them incapacitated and force many to lose jobs and dump their scholarship programmes.

The tariff will see another adjustment to 12 cents per minute in 2015 and 9 cents per minute in 2016, while interconnect rate will be further adjusted from the current seven cents to five cents by December 2014, to four cents in 2015 and ultimately three cents by 2016. At a price of between 23 and 25 cents per minute for voice calls, the operators in Zimbabwe were significantly benefiting.

There has been an outcry from mobile network subscribers over high charges but no tangible and scientifically proven steps had been taken by regulatory authorities to prove this and act on consumer complaints. The other major mobile phone operators are Net-One and Telecel, which is facing a serious corporate governance crunch.

The challenge by Econet was initially brought as an urgent application before the High Court on October 16 2014. The application was heard by Justice Mary Dube who, by judgment delivered on November 17, ruled that the matter was not urgent, and ordered Econet to pay costs on a punitive scale.

In her judgment, Justice Dube said the conduct of Econet as well as its lawyers deserved censure.

This was after Econet had failed to furnish the court with certain crucial exchanges dating back to 2013, when Potraz engaged all licencees to input into research to determine the fairness of local tariffs when compared to those obtaining in the region as well as comparable economies in the world.

It had not disclosed to the court that in June 2014, it had threatened legal action against Potraz, but had not done so. This fact was only disclosed by Potraz in its opposing papers, thus drawing the ire of the High Court judge.

The High Court also rebuked Econet’s lawyer, Mr Tawanda Nyambirai, for the manner in which he handled the matter, particularly the issue of trying to justify the conduct of a fellow legal practitioner, Mr Dominic Musengi who had certified the matter as urgent when it clearly was not and in signing a certificate of urgency a day before the founding affidavit was deposed to by Econet chief executive Mr Douglas Mboweni.

Aggrieved by the decision of the High Court, Econet through its lawyers Mtetwa and Nyambirai, noted an appeal to the Supreme Court last November. In the heads of argument, Potraz lawyer, Mr James Chikobvu Muzangaza of Muzangaza, Mandaza and Tomana, pointed out that there was no appeal before the court as finding that the matter was not urgent was interlocutory.

Mr Mazangaza also noted in his heads of argument that the finding of the lower court was only appealable after obtaining the leave of the judge who had made that finding. The Econet appeal was filed without such leave. In the Supreme Court on Friday, Advocate Regina Bwanali, instructed by Mr Nyambirai appeared for Econet.

The Supreme Court bench comprising Deputy Chief Justice Luke Malaba, Justices Paddington Garwe and Justice Bharat Patel, quizzed Adv Bwanali on how her instructing lawyers had missed such elementary stuff as pointed out by the lawyers for Potraz.

Adv Fadzayi Mahere, appearing for Potraz alongside Mr Muzangaza, protested at the attempts by Econet to want to abandon the appeal at the last minute. The matter was then struck off the roll with Econet being ordered to pay the costs of suit.

This result means that Econet together with Telecel and Net One, are now required to peg their tariffs within the reduced thresholds as set by Potraz in October last year. This should come as a welcome relief to the Zimbabwean consumers, who for long have been complaining about the high costs of mobile telephone services, especially when compared to prices obtaining in the region.

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