Survey is bullish about Zim telecoms
- Published on 20 July 2012
Zimbabwean telecommunications companies are expected to extend voice and internet services in the next two years.
This is according to a study compiled by research firm Frost & Sullivan states that said that although Zimbabwean telcos' medium term focus is on enhancing value added services such as e-commerce, this could change.
According to a report, Zimbabwe’s telecoms sector is looking lucrative, although international investments plans continue to be marred by uncertainty over the country's stability.
The country’s policy requires that foreign companies cede 51% shareholding to black Zimbabwean groups.
However, Frost & Sullivan remain bullish about Zimbabwe’s telecoms sector prospects, saying that companies are currently focussed on “connecting the unconnected” through infrastructure development.
“Over the next two years, the extension of voice and internet services is expected to grow. In the medium term value added services, such as e-commerce applications are expected to take centre stage,” said Gladys Mujuru, ICT research analyst, Frost & Sullivan.
Mujuru also said the “major threat to investment” in Zimbabwe’s telcos is the current uncertainty on security of investments.
She added that the indigenisation policy - meant to be an empowerment tool for Zimbabweans still contains vague aspects on issues such as its implementation and penalties.
Although there is rapid expansion of telecoms services, both voice and data some companies, according to the Frost and Sullivan analysis, are struggling to roll out networks due to limited funding.
Mujuru said this was one area, which was open for further investments in light of a moratorium placed on new license applications by the Posts and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ).
“Due to limited local funding, some players have sought foreign investors. The drawback is licensees are not willing to cede control to investors, coupled with the indigenisation act and the telecommunications act, also mandate local majority shareholding,” she said.