NetOne withers storm
Tonderai Rutsito Techspot
When I recently asked some people their opinion of NetOne the general response I got is that it is a struggling state-owned enterprise. This picture has further been buttressed by the fact that it made a $5,8 million loss and its One Wallet mobile money has not really taken off, which is the sad reality!
NetOne is facing heavy criticism for being the second largest of the country’s three mobile service providers despite having been the first to operate in the country.
Presented with such glaring facts, few people will bother to look for a silver lining on the dark cloud hanging over the state enterprise.
To understand why NetOne is where it is today there is need to revisit the journey that was travelled by managing director Mr Reward Kangai and his team and the trial and tribulations that they have to endure.
NetOne was officially launched with only 500 lines during the world solar summit in September 1996 under leadership of Mr Reward Kangai.
At the time it was a subsidiary of the then Posts and Telecommunications Company (PTC). It became an instant hit after running their first two Mobile Switching Centres (MSC) in Harare and Bulawayo installed by Huawei and Nokia Siemens Network in the 90s.
However, today 19 years down the line Netone it is the smallest of the country’s three mobile service providers despite having had a good headstart.
When NetOne was formed, it was not given much support but was left to sink or swim.
The industry was not profitable in the early days as owning a cell phone was considered a preserve for the rich.
Even around late 2006, owning a SIM card was a preserve of the few as a SIM card could be exchanged for a cow as prices were driven by the black market.
Buying a SIM card directly from the mobile operator was a nightmare as one had to contend with standing in long winding queues for hours on end and even then there was no guarantees of getting one.
NetOne SIM cards were the most valuable and expensive in the market as it had the best network coverage.
However, as years went on, access to terminal devices or handsets went down and many more lines were being directly released onto the market and Telecel Zimbabwe led the SIM card price reduction which eventually saw the price plummeting after 2010 and many more people jumped on the bandwagon.
This proved to be a turning point for NetOne’s dominance as Telecel and Econet Wireless capitalised on the situation to gain significant market share.
Some say NetOne was overtaken because it became complacent and relaxed while its competitors mounted aggressively campaigns.
In the face of all this NetOne suffered a major setback when their partner Firstel Cellular failed to pay $8million for the contract lines they acquired from the Government parastatal during the Zimdollar-US transition.
To date nothing has been recovered, even after the Supreme Court ruled in favour of NetOne.
While the other competitors were getting capital investment to compete aggressively and improve infrastructure, NetOne failed to get funding from its sole shareholder.
To make matters worse, the PTC unbundled into Zimpost, TelOne and NetOne with all three inheriting some of the PTC debt which derailed NetOne’s expansion plans.
The company had to compete against its heavily funded rivals Econet and Telecel who had millions of infrastructure and capital injection beating NetOne to the ground.
Thus NetOne became the least preferred mobile network in Zimbabwe as many saw better add ons from their aggressive and capable competitors.
Netone tried to come up with creative products and to its credit was the first mobile network in 2010 to introduce mobile money services, through their One Wallet which demanded SIM card exchange and was still not a common practice to the Zimbabweans.
The facility was however largely dependent on hard cash transactions which led to natural resistance by the market that led to its failure
Of course some argue that One Wallet failed due to NetOne’s inability to aggressively market and packaged the product.
To their credit Mr Kangai and his team continued to look at other option before hitting the right code with their dollar per day promotion which offers unlimited calls inside network for a dollar, which attracted millions back to the network, making it the second biggest network.
Their future further brightened when the Government finally managed to secure a $218 million infrastructure loan which they have use to complete the installation the first phase for their LTE project.
The support has come with changes as Government has instituted a major top executive shake up at NetOne which is now being completed by a new board led by Mr Alex Marufu.
While the shareholder support might be viewed as a response to Mr Kangai persistent fight for support, the credit for unlocking that support is likely to go to the new executives who assumed office on the first day of this month.
Probably this explains and justifies the squabbles that affected the full implementation of the management shakeup as the old guard at NetOne are being blended with new executives.
NetOne also suffered due to the State Procurement Board bureaucratic processes that led to unnecessary delays in awarding tenders and tender processes that revealed NetOne’s plans to its competitors.
Mr Kangai may not have achieved the best results at NetOne but he should be credited for ensuring that NetOne remained afloat over the years with very little support.
NetOne is poised to take over the market in the next few months as it readies to unbundle its new LTE project which is purported to become the first national LTE coverage in Zimbabwe, backed by their new broadcasting frequency which makes it cheaper to run LTE base stations, credit should go to Mr Kangai and his team that has brought the organisation this far.
- The writer is the editor for TechnoMag, Zimbabwe`s Premiere Technology Magazine, More In depth from www.technomag.co.zw follow us on our social platforms Twitter: @TechnoMagZw, Facebook: www.facebook.com/technomagzw