Annual mobile telephone revenue increased 36 percent to $ 1. 155 754 561 in 2018 from $849,880,489 recorded in 2017 as operating costs also scaled up by 25.3 percent to $660,599,344 during the same period, latest Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) fourth quarter (Q4) results show.
The increase in growth came as a result of huge demand and increased network coverage for the better part of the year, although revenue during 4Q suffered a 13 percent slid on account of consumer dampened appetite owing to inflationary pressures which started in October 2018.
The decline in Q4 revenue was however in contrast to increased mobile voice traffic which went up by 4.1 percent to 1.32 billion minutes from 1.27 billion minutes recorded in Q3 and this is as a result of increased calling in RTGS dollars as telecoms companies met their operating costs in US Dollars following the separation of Nostro FCAs from RTGS FCAs.
“There was an overall decline in mobile revenues vis-à-vis a growth in operating costs during the quarter under review. However, annual comparison shows that mobile network revenues increased by 36 percent to record $1,155,754,561 in 2018 from $849,880,489 recorded in 2017. Operating costs also grew by 25.3 percent to record $660,599,344 in 2018 from $527,345,083 recorded in 2017,” said POTRAZ Director General, Kallisto Machengete while presenting the results.
Machengete said the current levels of market concentration are not expected to change as Econet and Liquid are likely to maintain their dominance of mobile and internet access provider markets respectively.
Mobile internet and data consumption in 2018 grew by 77.6 percent from 15,361 consumed in 2017.
In 2018, Econet Wireless dominated internet and data traffic market share recording 68.5 percent, Netone gaining 26.5 percent and Telecel pulling five percent market dominance.
However, the rising cost of sustaining operations remains a threat to most telecoms companies with the prevailing economic atmosphere largely volatile.
“The growth of operating costs poses a threat to operator viability and puts pressure on prices. This may in turn impact demand for postal and telecommunication services as consumers reduce usage. Competition in the various service markets is expected to intensify; operators will compete on products and service offerings as well as prices through promotional offerings in order to retain subscribers and stimulate demand. However the current levels of market concentration are not expected to change significantly, with Econet and Liquid maintaining dominance of the mobile and Internet Access Provider markets respectively,” said Machengete.
Currently foreign currency challenges further compound headwinds in the sector as external partners have since cut business with local service providers.
This has been the major source of intermittent network disruptions.
“Yes, for the past four weeks this problem has been there because our network is facing service upgrade problems and needs service support. They are supposed to be paying their partners, they are owed a lot. So some of the partners have abandoned them. We have gone to RBZ to convince the Governor to prioritise the sector,” added Machengete.
The country has been undergoing network disruptions in recent weeks which has negatively affected business.