Econet rejects TrustCo Mobile's plea

Zimbabwe's largest mobile phone operator, Econet Wireless has rejected TrustCo Mobile's plea to reinstate the contract under which the Namibian firm supplied the software platform for Econet's mobile phone-based life assurance service, EcoLife.

TrustCo Mobile is a division of TrustCo Group Holdings Limited, a Johannesburg Stock Exchange-listed Namibian financial services company.

Problems started when TrustCo threatened to end the partnership with Econet after the local firm complained the Namibian company had breached their contract.

Econet told TrustCo to proceed with the termination of the six month-old contract.

But the latter is said to have later backtracked, deciding to stay in the marriage.

Understandably, the fallout between the two parties followed complaints by Econet that TrustCo inundated its subscribers with unsolicited messages, including at odd hours.

Incensed Econet subscribers had protested against the unsolicited messages - sent purportedly to promote the life assurance product - on networking Internet sites such as Facebook, tarnishing Econet's image.

TrustCo also demanded more fees for subscribers under the EcoLife, including the ones who were not yet members, but had only expressed interest.

The firm demanded US$1,11 for every EcoLife subscriber, which contrasted with the initial agreement that it would get US$1 per subscriber.

Econet Wireless chairman Mr Tawanda Nyambirai said his company rejected the demands, which riled TrustCo who then threatened to end the partnership.

"TrustCo demanded more payment than authorised in the agreement," he said.

"They wanted US$1,11 for every subscriber insured. They also wanted payment for subscribers who had only expressed interest. We rejected this."

Herald Business understands TrustCo had overstated the number of customers under EcoLife in an announcement on JSE, which peeved Econet.

Mr Nyambirai said the JSE-listed entity announced on the South African bourse they had insured 1,7 million customers, yet the figure stood at 1,2 million, which the local mobile phone operator felt misled the investing public.

Nonetheless, there was potential to insure more than the overstated 1,7 million customers, considering Econet's subscriber base is now believed to be over 5 million.

The marriage also collapsed because TrustCo allegedly made public details of their partnership when the parties had agreed not to release such information.

EcoLife is a mobile-based life insurance cover based on designated amount of airtime used, which determines the value of life cover one would obtain.

TrustCo's transaction facilitation technology provided automatic updates on members' entitled life cover and the conditions thereof based on airtime used.

But Econet said while it had briefly stopped insuring more customers, those already insured would not be affected by the setback.

The company said it was currently unable to provide automatic updates of customers' usage statistics after the unilateral termination of the contract by TrustCo.

Econet will, however, keep the customers' statistics on its switch and would process claims manually, based on the latest usage statistics recorded.

Econet is also working on an alternative system that will automatically calculate susbcribers' free cover entitlements and provide them with regular updates.

The company has, in the meantime, set up a contingency fund underwritten by First Mutual Life to cover all policyholders while appropriate technical solutions have been put in place to ensure continuity.