'Tariff cut to hit Zim telecom investment'

Mobile companies in Zimbabwe are expected to take a knock on their revenue generating capacity after the government introduced a 30% tariff cut this year, experts and telecom executives say.

Despite concerns and initial resistance over the tariff cut by Econet Wireless, subscribers, who had complained over higher call tariffs, will largely benefit from reduction. The country's telecom regulator, Potraz, is planning a further cut in the mobile call rate to 9 cents per minute in the next few months.

Experts and executives in the telecommunications industry say intensive capital investment into the industry could now be put on the back-burner after the government forced operators to cut voice tariffs from 23 cents to 15 cents per minute in January.

Telecommunications executives in Zimbabwe said mobile companies now have to "cut down on costs" and also work with "leaner" capital expenditure guidelines as the expected revenue will significantly be lower.

Thecla Mbongue, the senior research analyst at telecommunications and ICT focused research company, Ovum, however said average revenue per user (ARPU) numbers in Zimbabwe were now "being sustained and increased by the uptake of data" services.

"This may also affect investment, especially for Econet, since they are the biggest operators in Zimbabwe in terms of subscriber market share and infrastructure," Govan-Vassen, a regional telecommunications expert at Frost and Sullivan said.

Zimbabwe has three mobile companies – Econet, Telecel Zimbabwe and state owned NetOne. It also has one state run fixed phone operator, TelOne.