Telcoms sector to ride on rapid demand for services

Gift Machengete
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TELECOMMUNICATION companies say they expect to increase their investments in 2024 on the back of an anticipated surge in telecommunications and ICT services demand.

Organisations and entities’ adaptation to technological advancement and digital transformation to suit the ever-changing business landscape, is expected to sustain the demand for ICT solutions in the year.

In a great way, digital transformation is projected to create a positive growth environment for the local telecommunications sector as it drives demand for innovative solutions, which are critical for new-age business opportunities.

The foreseen growth is expected to create opportunities for indigenous telecoms companies in the short to medium term, through the provision of innovative products and services that include cloud computing, artificial intelligence, big data analytics, and Internet of Things (IoT) solutions.

According to the Postal and Telecommunications Regulatory Authority of Zimbabwe’s (POTRAZ), 2023 third-quarter sector performance report, mobile network operators’ total capital expenditure in the third quarter of 2023 paced up 27,1 percent to $33,9 billion in comparison to $26,7 billion made in the second quarter of the year.

However, it is feared that the capital expenditure did not increase in real terms and the same applied to revenues, a position that continues to stifle investment in infrastructure as evidenced by a decline in new terrestrial deployments.

“With the increasing need for businesses to undergo digital transformation, positive sector growth is anticipated. It is expected that demand for services will increase and boost the performance of the sector,” said POTRAZ director general, Dr Gift Machengete in the report.

He indicated that the digital transformation driven by companies will continue to drive the demand for ICT solutions as entities require technological advancements to adapt to the evolving business environment.

In general, however, the telecoms sector still faces challenges like inadequate foreign currency resources that are required to upgrade, expand and maintain telecommunication networks.

Also, the sector is heavily affected by operational realities that inhibit sector growth including power outages, which increase the cost-of-service provision.

The regulator highlighted the need to have a stable economy, saying it was an integral part of the growth and development of a robust ICT and telecommunications sector in the country.

Low disposable incomes in the country remain a major constraint on service affordability and uptake by postal and telecommunication users.

The recently reviewed tariffs are anticipated to improve the Revenue-to-Cost ratios (RCRs) of operators a development that is expected to spur increased investment by operators and enhancement of service delivery through improved coverage and quality of service.

The third quarter of 2023 saw a 7,5 percent increase in the number of active internet and data subscriptions to 10,647,190, compared to the 2023 second quarter’s 9,902,500.

Mobile internet and data traffic increased by 6,2 percent to 44,67 Petabytes, from 42,06 Petabytes while the internet penetration rate increased by 4,9 percent to reach 70,1 percent.

Used Incoming International Internet Bandwidth capacity increased by 6,6 percent to record 339 915 Megabytes per second (Mbps) from 318 742 Mbps. – Herald