Mixed fortunes for Zimbabwe telecommunications industry


THE mobile telephone networks revenue grew by 26.2% to record $2.1 billion in the first quarter of 2020 from $1.65 billion recorded in the fourth quarter of last year while revenue for fixed telephone also increased by 23.6% to $308.9 million amid indications that operating costs ballooned by 46.1%.

In the 2020 first-quarter report, POTRAZ noted an increase in revenue within the sector though there has been a 4 % increase in the number of active mobile subscriptions as well as a decline of 1.8% in fixed telephone lines.

“The period was characterised by growth in revenue generated by the mobile telephone networks which grew by 26.2% to record $2.1 billion in the first quarter of 2020 from $1.65 billion recorded in the fourth quarter of 2019. However, mobile network operating costs grew by 46.1% to record $1.4 billion from $988.2 million recorded in the previous quarter.

IAP revenues grew by 49.6% to record $754.3 million from $504.1 million; operating costs by IAPs also grew by 80% to record $749.4 million from $416.3 million. Fixed telephone revenue grew by 23.6% to record $308.9million in the first quarter of 2020 from $250 million recorded in the fourth quarter of 2019. Operating costs by the fixed network also grew by 4.7% to record $249.2 million from $228.5 million recorded in the previous quarter,” said Gift Machengete POTRAZ Director-General.

Machengete said the performance of the sector continues to be dependent on the economic environment which impacts the sector through service demand and consumption levels, operating costs and investment.

“The quarter under review registered growth in the total number of active mobile subscriptions which increased by 4 % to reach 13,7 million from 13,1million recorded in the fourth quarter of 2019. Hence, the mobile penetration rate increased by 3.6% to reach 94.2% from 90.6%.

The active fixed telephone lines declined by 1.8% to record 260,959 from 265,734 recorded in the fourth quarter of 2019; the fixed teledensity remained 1.8%. The fixed telephone subscriptions have been fluctuating over the years owing to the increased adoption of VoIP and mobile telephony by corporates and households alike,” he said.

Machengete feels data and internet services will continue to drive industry growth.

“The shift towards telecommuting and e-learning will drive demand for data and accelerate the voice-data substitution. The social distancing measures introduced to avoid the risk of exposure and spreading COVID-19 will see increased usage of ICTs as people avoid physical contact and resort to conducting business online.

The active internet and data subscriptions also declined by 2.5% to record 8,614,401 from 8,836,299 recorded in the previous quarter. As a result, the internet penetration rate declined by 0.7% to reach 59.1% from 60.6% recorded in the previous quarter. The overall decline in data and internet subscriptions is attributable to the 2.6% decline in active mobile internet and data subscriptions; this may be attributable to the increase in the prices of in-bundle data packages during the period,” he said.

The period under review registered a decline in total fixed voice traffic which fell by 6.9% to record 112.1 million minutes in the first quarter of 2020 from 120.35 million minutes recorded in the fourth quarter of 2019.

“Total voice traffic processed by the mobile networks also declined by 4.7% to record 1.33billion minutes from 1.4billion minutes recorded in the fourth quarter of 2019. Given the current economic environment, consumers have been inevitably substituting voice service with cheaper Over-the-Top services such as WhatsApp,” he said.

POTRAZ notes that foreign currency challenges have affected network deployment and maintenance as spare parts, equipment and vendor support fees require foreign currency. – ZBC