The future of telecoms in Zimbabwe

By Staff reporter | 14 Oct 2019 at 23:12hrs
With the current economic down turn, one can never be certain as to what the future holds for most businesses.

The telecommunication sector hasn't been spared by the economic tailspin putting which has put their future under threat.

As the power cuts continue, the country's telecoms industry is forced to make alternative plans so as to keep providing their services to their customers. Econet and other mobile network operators have opted to install solar systems to curb the power cuts.

This could sound like a solution but it is also an expense on the service provider's part. Some of the base stations are running on generators and the cost of fuel is simply going up.

Fuel has shot up from ZWL1.31 in January 2019 to ZWL15.64 in October 2019. This then means that with each price increase there is also a rise in operational cost of telecoms as the power cuts are still there.

Experts in the sector have bemoaned the costs of maintaining the networks in the dark hours with heavy demand for diesel to run the base stations, pushing the average costs up.

Besides the main fuel issue, experts said there are more operational and maintenance costs when there is no power supply, which is ballooning their Opex by more than 50%, while revenue is already declining due to low usage.

Telecel, Netone and Econet have all been in business for the past two decades and the ride hasn't been easy. According to the recently published Abridged sector report by Potraz for the second quarter there was a marginal decline of 1.1% in mobile voice traffic from 1.4 billion to 1.39 billion minutes . The sector also recorded a substantial decline in mobile internet or data usage of 8.2% from 10,202TB to 9,367TB.

This goes to show how the inflation has had an impact on the telecommunication sector as the price of data keeps going up and the sector recorded a decline in active internet subscriptions of 1.1% from 8.4 million to 8.3 million.

The mobile money platforms continue to gain traction as the country has been forced into a cashless society amid the cash shortages. There has been times when there would be no network coverage during power cuts. The situation has changed but the future of telecoms in Zimbabwe is uncertain. As they are pushed to increase tariffs the consumer's pocket is also strained and now people have to prioritize between buying a loaf of bread or buying data bundles.



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