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Econet dominates telecoms sector, Potraz report shows

04 September 2023

DESPITE mobile operators registering a 0,7 percent decline in active subscriptions in the second quarter ended June 30, Econet Wireless Zimbabwe continues to dominate the sector posting growth in various segments of the sector with Postal and Telecommunications Regulatory Authority (Potraz) saying policy measures implemented by monetary authorities have brought stability to the exchange and inflation rate, a new report shows.

In its abridged postal and telecommunications sector performance report second quarter, the regulatory authority said active mobile telephone subscriptions were at 13 955 937 as of June 30, 2023, from 14 051 251, recorded in the previous quarter.
“The total number of active mobile subscriptions declined by 0,7 percent, to reach 13 955 937, from 14 051 251 recorded in the first quarter of 2023.

Hence, the mobile penetration rate declined by 0,7 percent to reach 91,9 percent, from 92,6 percent recorded in the previous quarter.
“As a result, the mobile penetration rate declined by 0,7 percent to reach 91,9 percent as of June 30, 2023, from 92,6 percent recorded as of March 31, 2023,” reads part of the report.

However, Econet gained subscriber market share by 1,2 percent, while NetOne lost its market share by the same margin and Telecel’s share remained unchanged in the second quarter of 2023.

“Only Econet recorded subscriber growth in the quarter under review. However, the growth was offset by the decline recorded by NetOne and Telecel in the same quarter,” reads part of the report.

Econet’s market share of internet and data traffic grew by 2,8 percent, while NetOne and Telecel lost Internet and data traffic shares by 4,7 percent and 0,1 percent respectively.

The report further notes that mobile internet and data traffic increased by 11,6 percent to record 42,058.3 Terabytes in the second quarter, from 37,690.4 Terabytes recorded in the first quarter of 2023.

“Only Econet recorded growth in mobile Internet and data traffic in the quarter under review. Conversely, NetOne and Telecel recorded declines in traffic by margins of 4,7 percent and 56,5 percent respectively. However, total Internet and data traffic for mobile network operators increased by a significant margin, owing to growth in traffic by Econet.”
Revenue sector performance grew by 170,5 percent to record $435,7 billion, from $161,1 billion recorded in the previous quarter.

On the other hand, operating costs grew by 109,9 percent to record $215,8 billion, from $102,8 billion recorded in the first quarter of 2023.
“The sector operator revenues and operating costs surged by margins over 100 percent across all sub-sectors of the postal and telecommunications industry. Most of the operators incurred operating costs growth which was more than their revenues growth in the second quarter of 2023. This directly means that most operators made losses in the trading quarter.

“As in its nature, the telecoms industry requires huge capital outlays across networks, this cannot be achieved while the sector operators are running losses. Investments per operator have drastically decreased due to reduced revenue-to-cost ratios (RCR). This situation is attributed to an eroded tariff coupled with high inflation during the trading period,” it noted.

However, Potraz said the sector remains optimistic that positive sector growth can be realised in the coming quarter notwithstanding post-election expectations.

It notes that a cocktail of policy measures taken by the Ministry of Finance and Economic Development in the quarter under review of the second quarter has brought stability to the exchange rate and the inflation rate.

“Tight monetary and fiscal policy measures are expected to further stabilise the macro-economic environment. Inflation is also expected to ease further into the remainder of the year subject to policy consistency which could also boost operator revenues in real terms.

“The appreciation of the local currency against the US dollar is expected to reduce the import prices of bandwidth, network equipment and software. Improvement in power supply owing to the commissioning of the Hwange unit 7 and 8 power stations is expected to enhance the overall quality of service while reducing costs related to backup power on base stations.
“Service uptake is expected to rise in the forthcoming quarter hence growth of the sector in the third quarter of the year,” reads part of the report