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Econet Wireless Cuts Off Netone Over $20.4 Million Debt

Econet Wireless Zimbabwe has cancelled interconnection services between the mobile carrier and the state-owned Netone for failing to honor a $20 million debt.

In a statement, Econet said though the company had tried to engage the Posts and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) and relevent government ministries on the issue, it has failed to get the necessary payments.

"The regrettable effect of this irresponsible decision taken by Netone on subscribers is that no calls will be possible originating from Netone and terminating directly onto Econet as well as calls originating from Econet and terminating directly into Netone.”

Econet claims that the state-owned mobile provider has failed to pay $20.4 million which started accumulating in 2009. But Netone recently claimed that the two companies did not have any interconnection services agreement.

"In June 2012 Netone advised Econet that in so far as it was concerned, there was no interconnetion agreement between it and Econet and that it therefore did not owe Econet," read part of the statement.

Econet said other than during promotional periods, Netone has been charging tariffs of above 20 cents per minute on Netone to Econet calls. Of those 20 cent tariffs, 7 cents was supposed to be paid over to Econet.

"Therefore for Netone to accumulate a debt to Econet of $20 million, it must have billed in excess of $58 million to those of its subscribers calling Econet subscribers. In the circumstances, the failure to pass on an amount collected from its subscribers is not only irresponsible but also borders on dishonesty to Econet and Netone’s own subscribers."

Caught in this legal wrangle are Econet and Netone subscribers. Econet said customers are barred from making calls to each service until Netone complies with the terms of the agreement.

Independent technology analyst Limbikani Makani said interconnection services ensure that subscribers of different mobile operators are linked.

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"One mobile operator charges its subcribers a fee to interconnect to the other network, and at the end of a certain period the two networks have to pay each other."

Makani said this system is regulated by the government.

Econet Wireless Zimbabwe is Zimbabwe's largest provider of telecommunications services, providing solutions in mobile and fixed wireless telephones, public payphones, internet access and payment solutions.

Econet is also one of the largest companies on the Zimbabwe Stock Exchange in terms of market capitalisation. It was launched in 1998.

Netone officials were not immeditely available for comment.