Internet traffic down 8.2% in Q2 but telecoms revenue up

By Staff reporter | 04 Oct 2019 at 21:23hrs
Mobile data and internet traffic declined 8.2% in the second quarter mirroring the performance of the whole telecommunications sector due to the current economic challenges, which have hit consumer disposable income the hardest. All traffic in the sector declined except SMS which grew 30% but overall revenue increased due to the price increases effected in the period.
According to the Postal and Telecommunications Regulatory Authority of Zimbabwe report for the second quarter, mobile network operators reported a marginal decline of 1.1% in mobile voice traffic to 1.39 billion minutes from 1.4 billion  while there was a substantial decline in mobile internet/data usage of 8.2% to 9,367TB from 10,202TB as there were less promotional bundles and packages in the quarter under review. Active internet were down subscriptions of 1.1% from 8.4 million to 8.3 million. International outgoing traffic recorded the biggest decline of 42.7%. This is attributable to the increase in international tariffs in the quarter under review
However there was a marked growth in mobile network revenues by 50.1% to $375 million from $249.9 million against a 25.7% growth in operating costs to $233.7 million from $185.9 million.  POTRAZ DG Gift Machengete told the media during the presentation of the second quarter results that the overall growth in mobile revenue was attributable to the increase in tariffs in the quarter under review as well as the transition from the multi-currency era, as some foreign currency denominated income is now subjected to conversion at the official exchange rate. Operating costs grew by 25.1%, as a result of the inflationary pressures in the economy.
"Operators have implemented cost containment measures in order to suppress escalating costs. The current power supply challenges have negatively affected the sector in terms of service provision, lost potential revenue and increased costs brought about by the use of alternative power sources like generators, in an environment of rising fuel costs."
Dr Machengete added that going forward the performance of the industry will be dependent on the general economic environment in the country. "Operators will also focus on revenue growth strategies and alternative business models in the face of depressed demand. Demand levels for telecommunication services will be dependent on factors such as prices and incomes."
In the period, the total number of active mobile subscriptions as at 30 June 2019 was 12,354,315. This represents a 1.8% growth from 12,134,455 recorded as at 31 March 2019. The mobile 8 penetration rate increased by 1.5% to reach 84.8% from 83.3% recorded in the previous quarter. Telecel was the only mobile operator to record a decline in active subscriptions of 4.2%. NetOne registered the biggest growth in active subscriptions of 6%.
Econet lost revenue market share by 1.1%; NetOne gained market share by 1.1% whereas Telecel`s market share remained unchanged. The mobile operators recorded an overall decline in capital expenditure of 93.1% to record $1,581,703 from $22,978,234 recorded in the first quarter of 2019. Investment is cyclical and the current huge decline in capital expenditure may be attributed to the transition from the multicurrency system as business adopts a ‘wait and see' approach as well as the credit squeeze.
Average Revenue per User is shown below:

There was an overall growth in active mobile money subscriptions across all operators. The growth in the value of transactions can be attributed to a number of factors such as the general increase in the cost of goods and services as well as the growth in the number of uses and users. Ecocash processed 99.6% of the total value of transactions up from 99.4% recorded in the previous quarter.



WhatsApp Newsletter

Follow us

Latest Headlines