Mobile Network Operators (MNOs) saw revenue grow 26.2% in the year to March to $2 billion from $1.6 billion in Q4 2019 according to a Q1 sector performance report released by POTRAZ.
However, costs outgrew revenue at 46.1% to $1.4 billion from $0.988 billion in Q4 2019. POTRAZ acknowledged that the rise in costs was due to inflationary pressures in the economy, but the regulator has been slow in adjusting tariffs for the MNOs.
Econet accounted for 81.9% of the total revenue which is down 0.2% from the 82.1% contributed in Q4 2019. Netone contribution to revenue was up 0.5% in the quarter under review to 16.5%, as Telecel contributed a mere 1.6%.
Mobile money transactions conducted between January and March 2020 fell 9% to 469 million from 517 million recorded in Q4 2019. As a result, Cash In and Cash Out values also declined by 5.9% and 14% respectively.
In Q4 2019, Cash In value was $6.19 billion but fell to $5.8 billion in Q1 2020, with Cash Out value in Q1 2020 recorded as $1.38 billion from $1.60 billion in Q4 2019. Cross network transactions grew the largest as they saw a 135.9% growth to $629 438 in the period under review from $262 552. Airtime, Bill and Merchant Payments also saw sizeable growth after they grew 129.8% to $12.19 billion from $5.3 billion the previous quarter.
However, Econet continues to dominate the mobile money fraternity in both volumes and values as it accounted for 98.31% of volumes and 95.92% of values. One Money was able to increase its market share in value by 2.94% to 4% in the quarter under review due to its zero-rating policy on all mobile money transactions.
Telecash continues to fail to penetrate the mobile money industry as it accounts for a paltry 0.04% in both volumes and values.
In terms of subscribers, Telecash was the only operator to see a decline in subscribers as it lost 1.4% to 52 564 in the quarter. One Money saw the biggest growth percentage after it recorded an 18.4% increase to 555 255 subscribers. During the same quarter EcoCash continued to stamp its authority as it closed with a subscriber base of 7 million after adding 3.7% in the period. EcoCash controls 92.1% of the market from 91.9% in the preceding quarter, with One Money now having a 7.2% market share from 6.4% in Q4 2019. Telecash remained flat at 0.7%.
At close of March 2020, POTRAZ said the country had 13.7 million active subscribers and 24 million total registered mobile telephone subscribers. In percentage terms only 43.7% of the total subscribers were active in the last quarter.
In terms of active subscriptions, Econet again led the industry with 9.6 million active users which is a 5% increase from Q4 levels of 9.1 million active subscribers. With a growth of 4.9% to 3.3 million active subscribers due to the One Money zero rating on mobile money transactions, Netone came in second. Telecel however was losing subscribers in the period due to poor network reception for people outside the CBD as well as load shedding as they have no backup on their substations. Eventually the struggling company lost 9.4% of its active subscription to 825 478.
Telecel now accounts for just 6% of the mobile subscribers' market share down from 6.9% in Q4 2019. Econet increased its market share as it closed the quarter at 69.8% from 69.1% in the previous quarter, as Netone also increased its market share by 0.2% to 24.2% in Q1 2020.
According to the regulator, active internet and data subscriptions were also down as they lost 2.5% to 8.6 million from 8.8 million at close of 2020. The increase in cost of data has had a significant share for the demise of usage as well as priority repositioning by consumers on their inflation eroded income.
Despite the fall in active subscribers, mobile internet and data traffic was up 2.8% to 6 661TB from 6 489TB recorded at the close of 2019. With increased working from home initiatives, e-commerce, e-learning among other activities data usage is going to increase as active subscribers fall.
In terms of challenges POTRAZ said foreign currency challenges have hampered growth in the industry as well as maintenance of base stations. Creditors are a problem as they are paid in hard currency and also the high cost of international internet connectivity remained a challenge since the country accesses bandwidth from undersea cables via Mozambique and South Africa.