Telcoms revenue jumps 181 percent

The telecommunications industry’s annual revenue for year 2019 surged 181 percent to $4,5 billion compared to $1,6 billion recorded in the prior driven by inflation induced price hikes.

Last year Zimbabwe experienced rapid price increases for goods and services across sectors as inflationary pressures set in.

The telecoms sector was not spared. According to regulator, the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), the sector recorded both growing revenues as well as rising operating costs during the year. Average quarter on quarter revenue growth was 87 percent against operating cost growth of 90 percent.

During the year under review, annual operating costs hit $3,3 billion from US$974 million recorded in 2018.

Internet and data usage continued on a growth trajectory registering a 31 percent jump to 35 733 Terabytes.

However, this was a significant decline from the 77 percent growth rate registered in the prior year.

This came as the internet penetration rate also went down 2 percent largely due to significant  reduction in competitive promotional offerings by operators forcing subscribers to cut down on use of multiple sim cards, while waning disposable incomes due to inflation also came into play.

In 2019, total voice traffic was 15 percent firmer to 6,15 billion minutes.

“The growth in voice traffic is attributable to growth in mobile on-net traffic because of promotions that offered bonus minutes for calls within the same network,” said Potraz director general Dr Gift Machengete.

Both international incoming and outgoing voice traffic fell 4 percent and 34 percent respectively as consumers opted for alternatives availed by over-the-top services, such as WhatsApp calling, which are relatively cheaper.

On the positive, the year witnessed significant improvements in network coverage following new base station deployment across the country.  While the general economic environment will determine performance of the sector going forward, data and internet services are expected to continue driving sector growth.

Dr Machengete, however, indicated that demand levels for fixed broadband at household level may fall due to rising prices.

“The use of Over-the-Top services, such as WhatsApp, Skype and Viber, is expected to grow as consumers cut back on communication expenditure due to dwindling disposable incomes.

“In the face of depressed demand, a shift in operators’ business models around Internet of Things (IOTs) is inevitable, as is the trend the world over,” he said. – Herald