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Zimbabwe telcos pin hopes on increased competition, data use

Zimbabwe telcos pin hopes on increased competition, data use

As operating costs continue to escalate, telecom operators in Zimbabwe are pinning their hopes on increased data and voice telephony usage (and an improvement in the local economy) as they await an official response to requests to raise tariffs.

Data and voice telephony usage is viewed as an opportunity to recover revenue growth after income dropped significantly in 2018.

Gift Machengete, director general of the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) said: "The performance of the telecom sector in 2019 will be dependent on the general economic environment", which is currently inflationary.

In February 2019 Zimstats put the rate of inflation for Zimbabwe at 59%.

A statement issued by Potraz reads: "Operators have submitted requests to increase tariffs (while) as of now no tariff increases" had been approved.

Presenting the 2018 fourth quarter telecom sector performance report in Harare, Machengete acknowledged that operators are battling economic headwinds emanating from the operating framework.

"The economic environment affects the sector through service demand and consumption levels, operating costs, investment et al," said Machengete. "The current inflationary pressures in the economy pose a threat to operator viability and puts pressures on prices... this may in turn impact demand for telecommunications services."

However, competition is expected to intensify and will result in competitive prices for consumers.

"Data and internet services will continue to drive industry growth, exceeding the revenue contribution of voice service. The use of over the top services is expected to grow as consumers cut back on personal expenditure," adds Machengete.

Market statistics released by Potraz stated that in the fourth quarter period to December 2018, total number of active fixed telephone lines increased by 1% to reach 268 849 subscribers. Mobile phone subscriptions increased by 1.3% to 12.9 million, while the mobile penetration rate strengthened to 93.1%, with cellular voice traffic increasing by 4.1%.

Mobile internet usage increased by 15,7% after active mobile internet subscriptions soared by 13.4% to 8.7 million, and internet penetration increased to 62.5%.

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