THERE has been a marked decline in active mobile subscriptions, mobile penetration and mobile voice traffic usage according to Postal and Telecommunications Regulatory Authority of Zimbabwe-Potraz– sector performance report (2019).
The report, covering the first quarter of the year, is based on data produced by service providers including MNOs such as Econet, NetOne and Telecel. Econet and Telecel gained market share by 3.4% and 0.4% respectively during the same period. NetOne lost market share by 3.8%.
Mobile operators recorded a decline in revenues with Econet recording the biggest decline of 15%, the report indicated. The decline in mobile revenue is attributable to the decline in voice traffic and revenue thereof, which still accounts for 59.3% of total mobile operator revenues.
The performance of the industry which is largely dependent on the economic environment is a work up call for operators in the telecom industry.
According to the report, the “Telecommunications operators are also expected to focus more heavily on customer retention and churn in the face of dwindling revenues from traditional services and rising operating costs.
Cutting costs will remain crucial for many operators to maintain viability in the current inflationary operating environment.”
A decline in active mobile subscriptions and penetration-the report stated- was recorded in the quarter under review. “Active mobile subscriptions declined by 6% to record 12,134,455 from 12,908,992 recorded in the fourth quarter of 2018.
Using a population of 14,572,011 for 2019 as per ZIMSTAT projections, the mobile penetration rate declined by 9.8% to reach 83.3% from 93.1% recorded in the previous quarter.”
The decline in active mobile subscriptions is reflective of the general depressed demand in the economy, mentioned the report. Additionally, a number of promotions were also modified in the quarter under review; the reduction in benefits could also have led to a decline in multi-SIM usage thus negatively affecting the total active subscriber base.
The Main Sector Trends for the First Quarter of 2019 Compared to the Fourth Quarter of 2018.
- The total number of active fixed telephone lines increased by 3.1% to reach 273,330 from 268,849;
- Marked growth in fixed voice traffic of 6.5% from 113 million to 120.3 million minutes;
- Increase in fixed telephone revenue of 12% from $38 million to $42.6 million;
- Active mobile subscriptions declined by 6% to record 12,134,455 from 12,908,992;
- Marked decline of 9.8% in the mobile penetration rate from 93.1% to 83.3%;
- Decline of 4% in mobile voice traffic from 1.467 billion to 1.404 billion minutes;
- Substantial increase in mobile internet/data usage of 19.2% from 8,559TB to 10,202TB;
- Significant decline in mobile telephone revenue of 13% from $287 million to $249.9 million;
- Mobile network operating costs increased by 6.4% to record $185.9 million from $174.8 million;
- Active internet subscriptions declined by 3.3% to reach 8.4 million from 8.7 million, which saw the Internet penetration rate dropping by 5% to reach 57.9% from 62.9%;
- Internet Access Provider revenues increased by 6.7% to record $74.4 million from $69.7 million;
- Significant decline of 30.2% in Postal and courier volumes from 2.1 million to 1.5 million items, which saw revenues declining by 22.1% from $8.8million to $6.9 million.
The report stated that, there was an overall decline in mobile voice traffic in the first quarter of 2019. “Outbound roaming traffic recorded the biggest decline in voice traffic. The decline in outbound roaming traffic is attributable to the rebasing of roaming tariffs in line with the official USD: RTGS exchange rate in the quarter under review.”
There was an overall growth in mobile data and internet usage across all networks.
“In-bundle mobile internet and data usage constituted 92.7% of total usage. This is attributable to the discounted in-bundle data rates. Econet gained market share of internet and data in line with the huge growth in traffic. On the other hand, Telecel and NetOne lost market share of internet and data usage.”
According to the Potraz report, mobile money services are expected to continue playing a key role of bridging the financial divide by providing safe, secure and cheap financial services in areas where many Zimbabweans have no access to formal banking systems.
Volumes of mobile money payments are expected to maintain an upward trend due to the significant increase in the number of financial services offered on mobile money platforms the report stated.
“There was an overall growth in active mobile money subscriptions across all operators. One Wallet recorded the biggest growth in active subscriptions. One Money gained 0.9%; Telecash’s market share remained unchanged at 0.8% whereas Ecocash lost 0.9%.”
However, there was a decline in the value of cash-out, cross network transactions as well as the total number of transactions.
“Cross-network transactions have been consistently declining and this is attributable to the lack of comprehensive wallet to wallet interoperability amongst the three mobile money providers. Ecocash processed 99.4% of the total value of transactions whereas Telecash and OneMoney processed 0.1% and 0.5% respectively.”
Data and Internet Service
There was a decline in active data and internet subscriptions, which is reflective of the general depressed demand in the economy stated the report. “Fibre subscriptions recorded marginal growth. This could be attributable to the review of fixed internet and data tariffs in the quarter under review.”
Despite the challenges in the economy, data and internet services are taking over as the main driver for the sector growth.
“4G/LTE deployment, Fibre to the Home (FTTH) deployment, ADSL and other forms of broadband access technologies will take centre stage as operators try to keep up with increased demand.
Whilst broadband availability is improving, 3G, 4G as well as fixed broadband connectivity are yet to be ubiquitous. Although penetration rates for various services experienced a big decline in the first quarter of 2019, they are expected to stabilise and grow marginally during the course of the year.”
The total number of active internet subscriptions declined by 3.3% to record 8,431,581 from 8,723,242 recorded as at 31 December 2018. Using a population of 14,572,011 for 2019 as per ZIMSTAT projections, the internet penetration rate declined by 5% to record 57.9% from 62.9% recorded as at 31 December 2018.