Tariff increases unsettle Zimbabwe telecommunications firms

Zim telcos
feel rattled

Tariff increases will
have an impact.


Monday, Nov 11th

Zimbabwe wants more MNOs

Zimbabwe wants more MNOs

The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) is considering proposals from local and foreign venture capitalists keen to engage the country's mobile public network.

Zimbabwe's mobile communications space features three networks: NetOne, Telecel and Econet, and according to Potraz director general Gift Machengete, more operators would increase competition and lead to better service delivery and reduced charges.

Kestrel Corporation is part of the Empowerment Corporation, a consortium of local investors which holds 40% share of Telecel. The remainder is owned by the government and the state is also the sole shareholder of NetOne, while Econet is a private firm.

Potraz has sounded the call for more players at the same time the government is reportedly looking to sell its stake in NetOne and TelOne.

"There is still available space for more players in the telecoms industry," Machengete said.

Local telcos have had to increase mobile voice call and data tariffs as economic challenges continue to impact operations.

The country's mobile voice traffic has declined by 1.1% to record 1.4 billion minutes consumed in the second quarter of 2019, according to Potraz.

Former NetOne chief executive officer Reward Kangai said "My view has always been (of) strategic partnerships between state-owned telecom operators and large international big brands like MTN, Vodafone in order to benefit from economies of scale and scope in an industry that's largely global. Small operators are doomed."

South African telcos Telkom and MTN reportedly previously expressed interest in the two Zimbabwean companies, but nothing concrete followed.

Kangai referenced reported interest by South African telcos Telkom and MTN in NetOne and TelOne.

"My management and the professor C D Ndlovu led Board of Directors did everything possible to get MTN as a strategic partner for NetOne," said Kangai.

According to the Potraz sector performance report for the quarter ended June 30, 2019, players in the mobile public network sector registered growth in revenues.

Mobile network operators during the period under review registered a 50% growth in revenue to US$375-million from US$249.9-million in the previous quarter.

Mobile penetration stands at 93.1%, while internet penetration has reached 62.9%, according to the regulator's report.

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