Is ZOL Afraid Of Econet?

February 24, 2010

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2–4 minutes

to read

Hi, I’m Max Soutter. If you’re into marketing, AI & growing businesses – you’re in the right place!

Is Zimbabwe Online getting nervous over Econet’s promised 3G?

Wouldn’t blame them. They’ve never come up against competition this big before. In fact they’ve had it pretty easy up until now and they’ve done well with their Zolspot (hot spots) expansion. Still the arrival of 3G technology, though delayed is imminent and ZOL has a fight on their hands.

In a recent email broad cast to over 10 000 people, they made their first move – a good one too. Their headline…

“Stop Waiting For Promised 3G…”

Want to read ZOL’s Advert? Email max.soutter@gmail.com with the subject line ‘ZOL Advert’ and I’ll send it to you.

They explained that WIFI is faster and available right now. The logic is, why wait for something that may ‘never’ come when you can get connected today? ZOL went even further by offering a great package too;

70% discount for a full GB of WiFi Access.
30 minutes of free surf time a day
50% discount rates during off peak hours

All for just $30. If you use WiFi a lot you’d be crazy to ignore it.

None of this would mean as much if not for the timing – just under 2 weeks before Econet’s promised release for new 3G availability. It’s obviously an attempt to lessen the effect and significance of Econet’s launch. A great ad, a great offer…but alas, it’s far from enough.

Is this the End of ZOL?

Econet, already a formidable adversary (ask Netone) is only the start of ZOL’s problems. Telecel isn’t far behind and even Netone is on the way with 3G too. All this represents a significant chunk of the customer base ZOL has currently – and we haven’t even talked about Econet ‘s Fibre optic project yet.

They also have to deal with wifi’s real disadvantage compared to 3G…accessibility. Over 60 Zolspots (Hotels, restaurants etc) is commendable, but is it enough to compete with 1 million cell phones and modems that can pickup 3G?

Making matters worse is that 3G also comes in a lot cheaper, just $25 a month – and given enough competition between ‘Telecompetitors’ and that could become cheaper still.

How This affects You

Well for one thing, you’ll have more options for connectivity than ever. More importantly though, so will your customers. I’ve been saying for a long now that the Internet will affect Zimbabwe business in significant ways.

There’s just no denying the effect of that many people in Zim, suddenly having easy and cheaper internet access. You can choose to be ahead of the curve, or behind it.

As for ZOL… let’s not pronounce their end demise just yet…the fat lady hasn’t started singing yet (although the band seems to be getting ready). Maybe they have something up their sleeves? Besides that, it still amazes me how many individuals and companies are still on dial-up. Perhaps the market, for now is big enough for both David (WiFi) and Goliath (3G).

I really did like their email broad cast though. Significantly better than most email marketing efforts I see from local companies. There are some smart people in the ZOL team and they won’t be going down easily. About their email advert;

They took advantage of their competitors failure to deliver on time
Great headline
Good logic
Benefit driven,
Great offer
Sent to a fairly well targeted list.

You should see it.

Want to read it? Email max.soutter@gmail.com with the subject line ‘ZOL Advert’ and I’ll send it to you.

Go ahead, leave a comment…

35 responses to “Is ZOL Afraid Of Econet?”

Arthur

February 24, 2010 at 9:05 am

This is good news for many reasons. Competition is what really benefits all, the end user, the innovator and also pushes the incumbent to rethink their strategy. MAX is dead on with his analysis and predictions. One thing we have learnt in this tech arena is that, you have to continually re-invent yourself. Technology and the internet now make it possible for a one or two man startup in a garage in Silicon Valley, or elsewhere, to de-rail your operation overnight. I see it here every month. Think of it this way. If Econet was the established provider with the most customers on 3G and ZOL was the new guy on the block offering 3G at the prices they are trying to stay in the game with, wouldn’t this pose a real threat to Econet. ZOL may play with many strategies, prcing being the easiest, but may also realize that infrastructure is what hurts them,and may have to shift their business strategy to a services quadrant and focus their energies there. You have to move quickly. Infrastructure pricing has a cap, but the juice is in the services. Know your customers, the supply chain and BOND with them. This is what keeps Microsoft at the top, not technologically, but market adoption. Microsoft windows was never better than Linux, but Microsoft beats all OS vendors hands down because they own the supply chain, the complementors (Programmers, service businesses, and proprietary platform) Linux has none of these bonding points in business that allow it to compete with.

So you got to love the competition and there is no stopping it. This is a major milestone in Zim Tech business and the tech adoption wars are going to only get worse in a good way, and happen more frequently. Innovation is key. Focus on the customer.

Love to you all.

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Nigel

February 24, 2010 at 9:27 am

Spot on Auther.

Max i think they’re shaking in their boots…with damn good reason. Look at what Econet did to Netone. ZOL and the industry as a whole has had it way to easy for too long. Competition will do everyone some good.

It will be interesting to see the effect this has on internet cafes with have been popping up everywhere in the CBD lately.

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Kudenga Mukodzongi

February 24, 2010 at 9:33 am

I am sure most of us have travelled extensively to many countries. Give me one example where 3G has beat the traditional broadband options in serious business? 3G will bring internet to your phone and to a much lesser extend to your home computer! while this might be ok for some users it is not ok for the serious internet users. Looking at markets like Kenya, SA, US. 3G will co-exist nicely with true broadband connectivity. People should get more excited about terrestrial-cum-undersea cables that are coming to Zimbabwe. The schedule is like 3-6 months. So to me I am excited about cable coming, 300ms tops to US and Europe the REAL Broadband is coming. price will come down too!

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Arthur

February 24, 2010 at 9:41 am

Nigel,

Thanks for your comment and you do bring up an interesting point which asks the question! What happens to downstream systems when a new technology further up the chain displaces a current technology? So other businesses too should be looking at the entire spectrum of new technology and customer usage patterns to see if the shift, (which always catches companies, such as ZOL, off their feet) will affect their position in the market. Internet cafe’s should really be thinking of how they are going to position themselves for the next wave in mobile internet access, because it is the first stage in a two stage customer shift that is going to put them, the cafe’s, out of business. The second stage is when the majority of internet users now have their own laptops coupled with 3G. GAME OVER

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Arthur

February 24, 2010 at 9:49 am

Kudenga,

“300ms tops to US and Europe the REAL Broadband is coming. price will come down too!”

Oh yes you got to love it. I guess, for many, Bandwidth Christmas couldn’t come any sooner. 🙂

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Taffie

February 24, 2010 at 10:03 am

Kudenga, you maybe right about the technologies co-existing together…but that doesn’t take away from ZOL needing to work extra hard too. Their current market share is based on having little or no real competition and that’s changing now.

They’ll need to be a lot more innovative to stay in the game at the same level. A good many i’d imagine who are currently using wireless, would gladly shift to 3G if given the opportunity and pros and cons.

You’re right though…terrestrial is where it’s at!

Max, great post – as always.

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Collin

February 24, 2010 at 10:20 am

Good post Max. I read their email ad, good offer. Maybe their panicking or maybe it’s a strategy, i don’t know. I know they never offered us anything this good before!

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Arthur

February 24, 2010 at 10:27 am

Colin,

True, it is hard to tell if they are panicking or if it is a strategy. The scary part is when panic and strategy are seemingly one, which they can’t be. If they are, you;re likely doomed unless you have a big enough market share, or are quite diversified in your product offering. What they should have done was to see this coming at some point and lock you in to their offering. they should have communicated emotions that will not let you want to jump ship. Just like apple does, Emotion, buzz, good technology, superior design.

It does seem inevitable that they are likely going to be seriously affected by this shift.

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Kudenga

February 24, 2010 at 10:31 am

Taffie,

I take it ZOL is the leader in internet in Zimbabwe judging from all the posts I have read. I would assume being business minded people they are on top of their game. They must have seen this coming 🙂

The way I see it Econet will always be pro Voice thats where they make their money from. Looking at their performance on voice they are not exactly an efficient horse either.. assuming an overnight takeover would be rather careless.. don’t get me wrong.. the shift will be there.. so everyone must stay on their toes… looks like Zim is catching up!

btw.. I think the next big money maker would be *content* Arthur?

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Zand3r

February 24, 2010 at 11:59 am

3G may be more available, and cheaper but remember you get what you pay for!

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mandeya

February 24, 2010 at 12:02 pm

max good post. i think zol could very well have something up their sleeves as you say. these guys have been king for a while now. you can be sure they wont be rolling over dead for econet. the most important thing is how this competition opens doors for us as biz people. i think we’ll see great progress from it all in the next 3 years or so.

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Arthur

February 24, 2010 at 6:01 pm

Kudenga,

You’re dead on. Content is the next big thing for/in Zim, and all the players should have started moving, or start now. We are seeing the shift in the US that cable companies may seize to exist or will have to change their portfolio drastically. The shift being that the consumers have moved on. TV is dead, in terms of profitability for cable companies. What has caused the shift for them? The internet, 8+ billion web pages to look at on demand. Who wants to watch ads and be interrupted every 15 minutes of a TV show by some ads that we don’t like anyway. So now most people are looking at their browser and not at the flat screen TV. Ad companies are moving from the TV networks to the online networks. That is why you see Comcast trying to or have purchased NBC (Content). The other major obstacle that will finally make it end game or close to it for cable companies is Apple. Just as Apple killed the music industry they will do the same to TV. We are also now seeing wireless broadband moving rapidly and making cable/DSL less necessary. There are now wireless broadband TV sets where you plug in the usb card to the TV or it comes with it, FloTV is now a wireless portable TV. etc..

So in Zim, infrastructure establishes a firm in the stronghold and if ZOL is unable to make headway in this sector then they may have to shift their model and capture other channels in the sector and/or invent new ones. Zim is ripe for it.

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Arthur

February 24, 2010 at 6:06 pm

Mandeya,

I am interested in seeing where/how ZOL are going to position themselves. I also wonder how fast the 3G provision will make the actual shift for the customers. Remember, the technology positions the shift but its the customer habits that actually make the shift happen. I like what Kudenga mentions that Econet may not be that much of an efficient horse either. I am not sure, but having good technology doesn’t mean that you automatically win the market wars. Execution coupled with good tech will make you king. It is possible that ZOL will maintain their position for a while depending on the effectiveness of the Econet provision and/or the customer habits.

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Nicholson

February 24, 2010 at 7:54 pm

Econet has invested a lot of resources for this 3G internet but with a failed takeoff. If you look at it that is why I think Telecel is now not clear on when they will get to give their clients internet except that they are still testing it since October 2009. ZOL on the other hand is poised for growth, looking at the recent VSAT connectivity they are now offering. And also ZOL spots which is making internet even more cheaper to access. In the near future seeing from the dominance it has always had on the market I am sure it is positioning itself to take advantage of the fiber optic installation to Zimbabwe. So those who will wait for 3g to be their answer to internet connection they could be need to be patient until these new players find a good solution of how to give you access without them loosing much.

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milton nzvengende

February 25, 2010 at 6:58 am

MAX HOW CAN TAKE ADVANTAGE OF THIS? HOW CAN BUDDING ENTREPRENEUR START EITHER INTERNET BASED BUSINESS OR START INTERNET OR SMS MARKETING.

I CURRENTLY SETTING UP A CREATIVE SHOP FOR DESIGNING LOGOS.

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Raymond M

February 25, 2010 at 7:03 am

Great Stuff

There are two sides to a book. Yes Econet is coming up with 3G and all sorts of added extras,however will they be able to maintain their service provision? Will they be able to support their customers in the event of problems arising with their network? I say this because the last time they introduced their 3G most of Econet subscribers where crying foul regarding the service.

Thus I think it is too early to suggest that ZOL is shaking in its boots because we are determined to face the competition and provide service that is dependable to our valued customers.

We can be shaken but never uprooted that is all I can say to Econet.

Thank You

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Arthur

February 25, 2010 at 9:47 am

WOW, I was hoping we would get some traction from ZOL itself.

Raymond, Good to hear you guys are on top of the strategy. Is your strategy wholly dependent on Econet’s service offerings being less than desirable? Are there any other potential weaknesses in the Econet offering that your Strategy team has identified? If Econet’s service proves to be more than exceptional, what are your predictions for ZOL’s position in the market and where do you guys stand technologically against Econet? Are there any other strategies, other than an aggressive pricing strategy to hold on to current customers, likely to come out of ZOL-Land?

Thanks for staying with it. The Zim Economy needs many strong businesses such as yours, and Zimbabwe can only be grateful for what ZOL and many other IT companies have done so far to enhance the country’s business, technological and economic standing in the world. Believe me, we need it more now than ever.
Much hope and success to you and your team.

Thanks

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Tafadzwa D

February 25, 2010 at 12:58 pm

Great stuff Max

My contribution will be, first and foremost, has anyone tried to call Zol? Has anyone seen how long you are made to hold on? We have Zol, Broadband, when ever there is a problem, if you call them, they take donkey years to come to you and at times it is very difficult to get through, its either they are under stuffed or what ever their problem is, if these guys cannot solve a simple problem withing a reasonable time, God knows what strategies they may be able to come up with if they fail to solve a simple problem such as handlig telephone services.

I agree thought that it may be time before Zol is booted out as one of the major service providers because people just do not move quickly to something new, say example, we have braod band, it works very well most of the time and when we have our problems, they take donkey years but thats another story, most companies such as NGo want good service, good internet connection and that is what zol is offering, so long there is no major reason why they should change, they will not, Zol’s most clients are NGOs that cares little about the costs and I am sure Zol will also be watching the industry so much that they will not keep their prices too high and their services as bad

Econet has its own problems, they have been promising 3g for donkey years and God knows whats their preparedness as far as technological problems that come with 3G are concerned, people will have in Zol becasue, even though they take donkey years, they will ‘eventually’ solve the problem. I have my doubts with Econet really but it is a known fact that Econet is one single threat to Zol, but looks like Telecel is putting its act together, we are told Chinese want to invest in Econet but since there is a Gorvenment hand in this, God knows when Tel One will finally work up despite its advantages over other players

Tafadzwa

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Tafadzwa D

February 25, 2010 at 1:01 pm

Lat paragraph, I meant since we hear Chine want to invest in Tel One not Econet, please note the error for further debate

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Max Soutter

February 27, 2010 at 8:38 am

Wow… thanks for all the comments

Here’s 2 more cents from me…

The new tech, with the help of good marketing will go a long way towards educating and empowering our population. In time, this will facilitate for a culture change that will get people thinking more online.

Technology IS different from adoption. Simply because the new tech comes in, doesn’t mean every will hear about it, understand it and embrace it. Whilst normally, this would be a huge concern, especially in Africa where the adoption of tech is notoriously slow – i think our situation is slightly different.

This is much bigger than Econet’s 3G VS ZOL’s Wifi…

Been hearing ‘reliable rumours’ on many other things happening this year to make internet FAR more accessible than ever. 3G, 4G, Fibre, wifi, wi-max blah blah. In other words…this is not a gradual tech advancement as would normally be the case – it’s dramatic. It’s fueled primarily by the World-cup and post world cup spill over the region is anticipating.

My belief is that the shear amount of innovation/ development AND marketing of them within such a short space of time…say the next 12 months, can have a ‘jolting’ effect that will get many more Zimbos ‘suddenly online’.

Am so excited to see it all happening.

Oh and yes, i’d have to agree, content is gonna be BIG!

Next challenge – once we have an influx of more people spending more time online, will be to show entrepreneurs how to actually monetize this. Besides other things, i think that at the point we can get reliable online transactions locally and with international entities (eg access to Paypal) – that’ll be all she wrote… Zim never the same again!

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katuri charles

March 1, 2010 at 6:00 am

ZOL is just plain panicking. both they and Econet are not yet to worry. For one thing they both serve different niches of the market. Econet is cellphone while ZOL is Data….They really should start worying if econet starts pumping resouces into ecoweb because only ecoweb is in ZOL’s market….and anyway we all do not have laptops to carry around to HotSpot neither do we live in their walking distance, why walk to surf….In such a case i would prefer 3g coz i can use it at home. the guys at ZOL should be worried about WIMAX…if they dont have that they can be easly be wiped out by Africom……Otherwise weighing in all factors i would rather wait for 3g and surf at my work place…

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Petros Ruwocha

March 10, 2010 at 12:11 pm

I have been following this thread and discussion with very keen interest.
What seems curious though is an apparent assumption that Zimbabweans are suddenly going to wise up to technology and the need to acquire (takes financial capacity) technological tools of production in any business environment. I see this apparent lack of appreciation (for want of better expression) as an opportunity in itself for budding and existing entrepreneurs to market products and services that 3G, 4G, WIMAX, true BROADBAND with fibre optic, offer them and the country, the opportunity to catapult them into first world technology. Fortunately on the other hand, Zimbabweans are not slow to jump onto NEW things, sometimes willy-nilly, but liquidity constraints have softened this weakness. As already pointed out, in an environment where sound, scientific business decisions are demanded of everyone, Zimbabweans will sacrifice anything to acquire knowledge, skills and resources where they see the benefit. The level of computerization is just not where it should be with the vast majority of businesses. We continue to witness business executives frequenting Internet Cafes to do some e-mailing etc. In this vein, I just do not see Internet Cafe business singing the blues any time soon, neither do I see ZOL on its knees because of Econet. By the way, I was very impressed by ZOL’s technical support just yesterday. Econet and Ecoweb have a long way to put their act together, customer-care wise. Me thinks they are taking on too much in too short a time, whilst trying to maintain and streak ahead in “Market Leader” business strategy. The dynamism of ICT makes this ball game nail-biting, the most agile will survive!

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Max Soutter

March 10, 2010 at 12:31 pm

@Petros – You’re right mate. Many will be online, but very few will actually have any idea on how to take advantage of it. That’s exactly what makes this an opportunity. After all, by the time ‘the masses’ are aware of an opportunity, it’s already on it’s way out.

So whilst everyone is on Facebook, checking email and (on the consumption side), smart entrepreneurs will be (on the production side) creating services and content that will in time become major competitive advantages.

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Prosper

March 11, 2010 at 9:21 am

Mr Soutter, if you are not careful, you may wind up making history! This is a fantastic blog, i love your work. Thank you.

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Tapiwa

March 15, 2010 at 8:16 pm

Econet and ZOL hardly compete. If anyone wants broadband internet today, guess who they’d go to? ZOL is not a WIFI only shop, btw. Has anyone noticed Econet’s 3G download ‘speed’ (for the lack of a better word)? I like Econet and where it is going, but as things stand, it is not really competing with ZOL with 3G: things will get interesting when they (Econet) get bigger pipes. (Yes, I know Econet provides broadband proper with direct-to-celltower radio – but that is not 3G).

That said, there is very little room to innovate online in Zim. As a developer, I’d say it hinges around lack of online payment. I would have thought ZimSwitch or eTranzact would have come up with an internet payment solution by now as they are the entrenched players with all the right links with banks, but perhaps they have better things to do. Without online payment, monetization becomes iffy.

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Terence

March 17, 2010 at 8:55 am

Ah Mr Soutter, jealousy aside, this is the best blog in the country! I’ve just now discovered your other discussions on your Google Buzz – http://www.google.com/profiles/max.soutter you are building something useful for all Zimbabwean business people Mr Soutter. Thank you!

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Takura

March 25, 2010 at 12:14 pm

I agree with Tapiwa. Until we get online payments going we can never really realise the potential for ‘real internet!’ There are a few more opportunities one could exploit though.

Anyone know about econet getting a billing server? I hear that they going to be charging you by the amount of data one downloads, which is normal. I just hope it won’t be ridiculous because surfing on the go is a godsend…

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Max Soutter

March 25, 2010 at 4:16 pm

Ya, would love to know more about the billing server thing too!

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basicz

August 3, 2010 at 4:10 pm

does zol have anything for domestic use affordable to an average zimbabwean because you find that most people prefer home internet in the comfort of their homes with no hustles.

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Jay

August 5, 2010 at 2:57 pm

Much as I love the issue of the 3G introduction by Econet, I’m really disappointed by the service. The speeds are not poor per say, they are terrible at the moment, Econet really needs to work on they connection speeds, I tried the service in different places Bulawayo, Masvingo, Gweru, in the CBD of Harare and in its outskirts, the connection speeds are just but frustrating.

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Arthur

August 5, 2010 at 4:32 pm

Jay,

Greetings to you and all. Are you able to shed more light on the details of your user experience with the service? For example, What exactly were the networks speeds you noticed, what device(s) were you using at the time(Laptop, cell, Iphone, smartphone etc..), and also what services were you interacting with at the time? (Email, web, phone app etc..)

Thanks

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Obey

August 24, 2010 at 1:17 pm

Hello all
I just want to thank you all for the great work you are doing.The more you talk about it the more Zimbas became aware of the trend the world over.
Keep the good work up guys

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Arthur

August 24, 2010 at 1:53 pm

Obey,

Good to hear your contributions. What is your opinion on what is happening now? I see ZOL has made much progress in their offering. VSAT, Skype, Negotiating Skype cards for local purchase. That’s innovative thinking. It makes for a better brand awareness even though the market is still small, you still have to think big and position yourself because when market adoption moves you want to be positioned to take advantage of it. I.E think if 4 million Zimbabweans come back home from many years living abroad, and being accustomed to the many options of services in those countries, which brand(s) in Zimbabwe would they want to purchase services from? That’s how companies should be thinking now. I’m alluding to a type of thinking not a pre-condition.

Thanks

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Bvunzandibvume Kufahakuuraye

October 25, 2010 at 10:32 pm

WOW! Good stuff guys most if not all the comments had a lot to offer. All that has been said will only demonstrate that our country is full of energetic and big thinkers. Because of these comments it is important for any competitor who is researching a market to understand that the people understand what they want. Henec less expensses in forums and focus groups. No point in any competitor waste time in trying to introduce systems that are old. Come 2010 we are already using cloud server such as youtube.

Be it ZOL or Econet they need to understand that the people are waiting for something that is global. Something that is up to date with whatever China, Turkey, USA, Iran or UK- these countries ar already doing most of their business online. This is the consumer end of the business. Where facebook, eBay, emails and electronic profile come in play. I hope the main stakeholders will invest in infrastructure this will then ensure big certain future. BT in Uk has a problem in this area, the infrastructure is nolonger competitive which is a threat to their strangle hold. Kenya apperently has the best so far in Africa, maybe the Obama effect has helped with the oceanica cabling.

The other thing is the governmentinfluence, they should be shouting out loud on this issue. Over regulating might inhibit progress any sector, however security is the most paramount component of growth and attracting investors. Crime is rife and if the government fail to harness this issue, playing catch up could be very expensive and futile.

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alloderm lawsuits

July 24, 2011 at 7:39 am

I want to express my thanks to the creator of this blog. Keep giving a good concepts and strategies. Many people will surely enhance their abilities by reading blogs like this.

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