- The telecommunications sector was hardly affected by COVID-19,
- Econet gained more shares on mobile subscribers during the lockdown,
- Inflation is affecting the operations of market shares in the telecom industry.
Econet Wireless Limited Zimbabwe has remained the market leader despite the difficulties faced by telecom sectors during the COVID-19 period which affected the businesses, according to the trading results for 2020 half year ended 31 August 2020 review revealed by Postal and Telecommunications Regulatory Authorities of Zimbabwe (POTRAZ).
The telecommunications sector is fundamentally dependent on the economic atmosphere which has an impact on service demand, consumption level, operating costs and investment. Network service providers in Zimbabwe also experienced the negativity of the COVID-19 global pandemic, as it affected the economy which is undergoing a deterioration. The Econet was recorded 68.5% of the share for mobile subscribers, NetOne 25.8% and Telecel was recorded only 5.7%. This has resulted in a total decline in active subscriptions as recorded by POTRAZ in the second quarter of 2020.
Even with high pricing of tariffs, due to a huge number of mobile base station infrastructure, Econet led telecom trading with a total of 4, 500 for 2G, 3G and LTE networks. These networks connect Econet subscribers in rural and urban areas with adequate access to the internet. However, people are preferring NetOne networks for the better speed in browsing although it has 2, 200, a total number of mobile base station infrastructure for 2G, 3G and LTE networks. While Telecel is struggling to improve the mobile base station infrastructure, it has 650 only for 2G and 3G networks, meanwhile, the network is not active in most areas. As a result, Econet wins the trade because its network covers most parts of the country.
POTRAZ has applied inflation-linked pricing system grounded on a specific price index for the Telecommunications Sector which is referred to as the Telecommunications Pricing Index (TPI). This system of pricing takes into account telecommunication operator costs to determine a viable tariff thereby ensuring operational sustainability whilst balancing the costs of telecom services affordable for consumers.
The rapid fall of Zimbabwe Dollar against the US Dollar and other foreign currencies has largely driven the telecommunications sectors to increase their costs. During the period, POTRAZ reviewed the industry’s Zimbabwe Dollar-denominated tariffs in line with Telecommunications Pricing Index (TPI) in a bid to align prices with inflation. Therefore, Econet company prices all its services within the limits set by POTRAZ.
The significant obligation for foreign currency controls the ability of operators to ensure that the superiority of service is maintained at an acceptable standard. For that reason, foreign currency is required by operators for infrastructure, software upgrades, and network support services as well as operating software licence fees. Data traffic increased as digital enablers were required in various sectors of the economy. Voice traffic increased by 7.9%, data consumption was up 63% whilst SMS traffic was up 41.6% compared to the previous half-year period.
Regardless of the decline in economic activities in Zimbabwe, Econet has managed its services for the customers as well as maintaining the tariffs and costs to avoid the collapse of the business. NetOne is following the Econet, as it also gained more subscribers during the lockdown period.