. . . Eswatini Mobile: ‘Mission Impossible turns 7 years old’
“We were having discussions on venturing into the telco business together. We discussed it for three years and one day, Victor said why don’t we start a mobile company. That was where the idea to start Eswatini Mobile was born. The company that was around had a monopoly for 17 years and we knew that had to end,” Shakantu says as he smiles.
Their discussions came at the right time. There was an outcry in the country during Sibaya, the People’s Parliament where emaswati complained about expensive packages in the sector. As though written in the stars and fate playing them a through ball to score. Following Sibaya deliberations, His Majesty King Mswati III said he would love to see more telco players in the market to reduce the cost of communications.
The process started off in August of 2016 and the license was finally awarded in February 2017. The Eswatini Communication Commission’s annual report of 2017 indicated that it had welcomed the passing of the Electronic Communications Regulations in August 206, which provided the Commission with the necessary legal tools to carry out its licensing mandate.
“I am pleased to report that the Commission licensed another operator, Swazi Mobile Limited, after noting the public outcry, as reiterated during Sibaya submissions, for the introduction of competition in the telecommunications sector,” the Chairperson at the time Sipho Shongwe said in the report.
“From that pronouncement, we were able to grab the opportunity to begin to say how do we set up a telco company. That was the beginning of how we started Eswatini Mobile,” Shakantu said.
Following His Majesty’s call for more players in the sector, there was an open tender process calling on those with capabilities to apply for a license. Companies from all over the world applied, including the two businessmen.
According to the ESSCOM report, the granting of the license was premised on the desire to promote competition in the sector, coupled with an effort to lower the cost of communication in Eswatini.
The Commission issued an Invitation To Apply (ITA), for companies with an interest to provide public telecommunications services in the Kingdom of Eswatini.
“The long, arduous process of evaluating the received applications for a third telecommunications licence was completed in February 2017, which culminated in the issuance of an Individual Electronic Communication Network and Service Licence to Swazi Mobile Limited.”
The regulator described the move at the time as a monumental achievement and a quantum leap in the move towards the awaited liberalisation of the communications sector.
“This licence ushered in a new era of hightech communication in the mobile space. For the first time, the Swazi populace will enjoy video calling and send high-volume data from their mobile devices wirelessly. Without a doubt, this licence brought much excitement to the sector and the country as a whole. As part of its drive to lower the cost of communication, the Commission embarked on discussions with the wholesale electronic communications provider, the Swaziland Posts and Telecommunications Corporation, and succeeded in reducing the wholesale price. The strategy was for the wholesale price reduction to trickle down to the retail customer, and be further cascaded to the end-user, translated into lower communication costs, thus resulting in affordable communication services in the country,” the then CEO Mvilawemphi Dlamini said in the report.
Shakantu said the process was an open one which they won convincingly.
“Everyone submitted a bid and we won it,” he said.
Little did the pair know that this would be the start of a very stressful period of their lives. The business required a substantial cash injection. Being novices in the sector, credit doors were not opening.
“Myself and Victor agreed that we would make contributions to start the business and each of us put down E50 million on the table and that’s how we started Eswatini Mobile,” Shakantu said.
Following that, the pair went to search for offices and started engaging service providers. to manufacture equipment. Following the initial investment of E100 million, the partners had to dig deeper into their pockets to continue pumping in the money. They used their existing businesses and personal assets as surety to seek more funds.
“We had to open several credit lines using our businesses to set up the business. The credit lines were well over E200 million using the companies for us to get to the first call that was made in July of 2017,” Shakantu said.
Having invested over E300 million of their own cash, the partners found themselves sitting with a conundrum, they needed to scale up and grow the business but it had hit them hard in the pockets already.
“We went out to the market and sold shares to the Provident Fund which bought 20 per cent and PSPF also bought 20 per cent. We retained 60 per cent. That is how the two came in as partners,” Shakantu said.
The proceeds from the sales of the shares helped the partners pay back some of the loans they had taken. Tragedy would however strike and throw a spanner in the works of the progress that was being made.
Gamadze was killed in January 2018, leaving Shakantu with having to deal with the credit liabilities that existed in the business.
“I was left with a burden of about E300 million worth of liabilities between the two of us. I’m still paying for that liability to this day. That has been part of the journey for me,” he said.
Despite the liabilities that exist, the business has continued to require cash injections over the years to get it to where it currently is. Shakantu said the joining of the Provident Fund and PSPF assisted in carrying some of the required investments to continue to grow the business.