Econet sues Potraz for $132m

ECONET Wireless has approached the High Court seeking an order compelling the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) to pay over $132 million in damages for losses incured after the telecommunications firm was ordered to reduce its tariffs in 2014.


Econet has also accused Potraz of making the telecommunication playfield uneven after allegedly failing to order other network providers such as NetOne, TelOne and Telecel to pay license renewal fees in the sum of $137, 5 million, which it was allegedly made to pay before being ordered to reduce the tariffs.


In the summons issued by Econet and filed at the High Court last month, the mobile network firm said it was also seeking an order compelling Potraz to order NetOne, TelOne and Telecel, cited as 2nd, 3rd and 4th respondents, to pay license renewal fees in the sum of $137, 5 million each.

The telecoms company also wants the court to issue an order restoring the tariffs set out in its (Econet) 2013 license structure and setting aside Potraz’s Regulatory Determination 1 of 2014.

According to Econet sometime in May 2013, it concluded an agreement with Potraz and the government where it was agreed that Econet would be issued with a new license on the same terms and conditions as its old license, save in respect of the matters specified in the agreement.

Pursuant to the license renewal agreement Potraz issued Econet with a license dated July 10, 2013 in terms of which Econet was entitled to charge and collect from its customers until July 2018.

“In breach of the plaintiff’s (Econet) license issued on 10 July 2013, 1st defendant (Potraz) reduced the tariffs charged by plaintiff from those set out in annexure “B” hereto to those set out in its Regulatory Determination 1 of 2014,” Econet said.

The company said the reduction in tariffs was ultra vires the powers conferred on the 1st defendant by section 100 of the Telecommunications Act.

“The reduction in tariffs was discriminatory in its effect in that it applied the same to plaintiff as it did to 2nd, 3rd and 4th defendants, yet plaintiff had paid the license renewal fees of $137, 5 million in full while 2nd, 3rd and 4th defendants had not,” Econet said.

“As a result of defendant’s breach of the license renewal agreement, and, or the terms and conditions of plaintiff’s license, plaintiff has suffered damages from loss of profit amounting to $132 670 807 which defendant is liable to pay.”

Econet added: “Plaintiff will continue to suffer damages at the same rate until the tariffs provided for in its license have been restored, which damages, 1st defendant is liable to pay.”

In the second claim Econet said it was an express term of the license renewal agreement that Potraz would charge and collect from NetOne, TelOne and Telecel the same license fees on the same payment terms that were charged and collected from it.

In the third claim Econet said it was seeking an order compelling Potraz to disclose the information relating to the Universal Service Fund for which Potraz is the trustee.
Econet said it had contributed over $59 million to the fund from March 2009 to November 2015 and as such it was entitled to a report.

25 Responses to Econet sues Potraz for $132m

  1. The Engineer January 14, 2016 at 7:58 am #

    Amazing Econet!!! Always looking for a fight. Tired of this company that tramples on users rights with such nauseating impunity every single day. POTRAZ should fight this with all its got. Remember your directive for disconnection of unregistered subscribers was not heeded by Econet on time, apply a fine for that similar to what Nigeria regulator did with MTN. Nxa!

    Tarriffs remain too high and POTRAZ needs to institute measures to further reduce tarriffs. Those who invested recklessly hoping to rob Zimbabweans are sick in the head and crying loudest now. So you now need $132m for Kwese Sports, dream on!

    • inini January 14, 2016 at 8:08 am #

      Engineer, you seem to deliberately forget that Econet is being treated differently to the others. Why does POTRAZ only flex its muscles when Econet does something and lets the others operate without paying the requisite license fees. Just asking?

    • Mina January 14, 2016 at 9:36 am #

      Engineer uyu akatsvawo…anoda zvemahara seshiri

      • tinomudaishe January 14, 2016 at 11:38 am #

        anenge asisiri engineer rinongowawo zita raanofarira

    • Hacha Ndizvo January 14, 2016 at 10:08 am #

      My friend – if Econet’s tariffs are too high it is not the responsibility of POTRAZ to reduce them. The responsibility to reduce them lies with the market – just give your business to Telecel or Netone and in turn their capacity will increase and Econet will be forced to have a rethink due to loss of business. Should we take you seriously when you say you are very much aware that Econet “tramples on users rights with such nauseating impunity” yet you continue to have an Econet line and use it while ignoring three or four other providers who will give you a service to suit your pocket. And you are a whole Engineer for that matter.

    • kuda January 14, 2016 at 11:00 am #

      my friend Econet was unfairly treated. it was forced to pay licence fees in full yet vana Telecel, foreign owned company havana kubhadhara, they are paying in instalments. For your information, Econet is the largest tax payer in zimbabwe so wishing its downfall impacts on governemnt and eventually on you the general person. lets not allow greed to kill our own home grown prospering companies. lets support them. nyangwe ikadhura at least Masiiwa gives back to the community more than any local company.

    • Mwalimu January 14, 2016 at 11:22 am #

      Hahahaha! You need some light hearted comedy in these stressful times! Thanks Engineer for the joke.

    • s shumba January 14, 2016 at 3:49 pm #

      Remove that title “The Engineer” – you have no clue of what you are talking about. Dont you see Econet’s reasoning – there was a clear agreement withtariffs clearly spelt out, Econet pays the extotionist $137m and POTRAZ reduces the tariffs. Not only that – POTRAZ does not demand from NetOne, Telone, Telecel what they have demanded from Econet.
      “The Engineer” – did you ever go to school.

  2. Baba T January 14, 2016 at 8:27 am #

    Econet feel short changed by Potraz in that they did not force other operators to pay licence fees and suspect this is genesis of their acrimony. They were treated unfairly. Considering the environment they are working in, they are the last to breach any regulation and will be suicidal to do so.

  3. liberal January 14, 2016 at 8:34 am #

    URIENGINEER WEKUPI ARIKUFUNGA SEDOFO?network and selling mazhanje is different man.DO YOU KNOW THE CAPITEX NEEDED FOR A TELECOMMUNICATIONS COMPANY, IF ITS THAT CHEAP THEN OPEN YOUR OWN CHEAP wonder why this country is terrible its because of ignorant people like you, masquerading as technocrats.Do you think its fair for others networks to operate without licences while only one pays, where is the fairness of that law?

  4. The Engineer 2 January 14, 2016 at 8:50 am #

    Hahaha “The Engineer” So you really think its fair for other network providers to operate without licences? Strange, an engineer who thinks like that. Maybe you should really go ahead and open your own company which will operate on zero costs and charge customers very little. Go ahead, we will all like that and trust me, everyone in Zim will luv this.

  5. sekuru January 14, 2016 at 9:38 am #

    Yes the license fees are very high and yes charging only one company is unfair. What I do not agree with is the story on tarrifs. It is my belief that a further reduction is necessary. Think about it Econet.

    • s shumba January 14, 2016 at 3:55 pm #

      go to the other providers – netone, telecel etc

  6. Francis Munangwa January 14, 2016 at 9:50 am #

    Econet is not fighting to increase tariffs but they will force Telecel and Netone to fight the tariff war on their behalf. If Potraz loses the fight, which they will do because they claim to have a kind heart to users when reality is they approved the upper tariffs because they were extorting 137mil from Econet on the pretext they will play by the book. There is selective application of the law by Potraz and if they apply the law fairly then Telecel and Netone will bust

    • Hacha Ndizvo January 14, 2016 at 10:16 am #

      Good analysis – if Telecel and Netone are forced to pay the full licence fees they will have no choice but to raise the fees through increasing their tariffs. Alternatively they may elect to maintain the current tariffs but they will no longer have the excess cash for those endless promotions. At that point Econet will turn the vice and squeeze them hard.

    • tinomudaishe January 14, 2016 at 11:43 am #

      how does the engineer think kuti cost ye$132m can be recovered when tarriffs have to be reduced afterwards.hahaha it does not surprise me coz the other three operators are all state entities tichapedzisira neeconet yacho yave a state entity at this rate.

  7. Sagitarr January 14, 2016 at 10:31 am #

    Potraz always talks about “levelling the playing field”. Their concept of levelling is very flawed if they “force” one operator to pay license fees and not the others. We all know that EW is a milk cow for the govt and it’s numerous appendages but this is unfair. We will follow this case with high interest!!

    • Kuta Kinte January 14, 2016 at 12:18 pm #

      You do not know how POTRAZ operates and you are arguing from little knowledge. Again you have not heard the inputs by other operators on Econet’s allegations unless if Econet got access to other operators’ finances and proved beyond reasonable doubt on license payments. Be very careful on how you parrot especially from scanty knowledge.

  8. Jamutiyasi January 14, 2016 at 3:40 pm #

    @Kuta Kinte,,,this is public knowledge yekuti you should pay your licence and is revealed but the fact remains kuti mamwe ma operators paid next to nothing,,,telecel ikuita ma monthly obligation eUS$ 5 million here BUT is failing to do so. Econet is being forced to share infrastructure yet other players were not investing in infrastructure,,,,nxaaaaa. asi ma tarrif ari high zvawoooo

  9. jiga January 14, 2016 at 4:13 pm #

    @Jamutiyasi.. on the issue of sharing infrastructure, gvt is right. Operators need to share infrastructure but pay the rentals/ or subscriptions to the owner of the infrastructure. It does not make any sense kuti netone, telone, telecel, africom, powertel etc eachone inoita base station rayo rakazvimirira rega. Sharing infrastructure actually makes operational costs cheaper … instead of 6 base stations pa gomo rimwe of different providers why not have one.. saving on electricity, security, diesel and maintenance cost.

    • marlenecarr456 January 14, 2016 at 4:26 pm #

      as Phyllis replied I am in shock that any body able to make $4140 in a few weeks on the internet . try this website..

    • Kuta Kinte January 14, 2016 at 5:50 pm #

      jiga you are correct because instead of having those base stations at one site, five more base stations can be installed and rent from each other. That is what developed countries do and that is effected by their regulatory authorities. We appear like we have more money concentrating all our resources at one point instead of spreading. Also in developed countries, much of the national optical fibre and also for private service providers is installed on their national power grid. We develop faster with infrastructure sharing. The problem with our telecoms service providers is that they take competition as being enemies.

      • mupari January 14, 2016 at 7:45 pm #

        Kunta.. ma developed countries ane anonzi mainfrastructure companies anodeployer matowers. In zim maoperators were sold a converged licence tht does not separate infrastructure from service provision. Secondly econet has always been sharing infrastructure with nrz telecel and other companies. The problem is being compelled to share without economically feasible arangements.

  10. jzi69212 January 14, 2016 at 9:49 pm #

    as Phyllis replied I am in shock that any body able to make $4140 in a few weeks on the internet . try this website..

  11. spears January 15, 2016 at 12:13 am #

    all of you are crazy POTRAZ is a telecoms regulatory authority which regulates companies registered under its arm, reviewing contents of the licences they give is their mandate for whatever reason, tarriffs etc. How much is econet swindling from every one of their subscribers by it as a network provider failing or intentionally allowing programs and applications to take money from our subscriptions without our knowledge. as a service provider they can do it by they let it happen. the should go to hell. they ve a subscription base of more than 2 million, how much are they stealing from each subscriber per day, per week per day. For instance as little as $2 per week multiplied by 2 million. Daylight robbers. Thank God you are not in America you deserve to be sued too for violating customer rights.

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