• Aggregate mobile operators revenues came off by 9.7% to $179.8m in the first 3 months of the year compared to the previous quarter. The quarterly outturn was however 7.2% up compared to the same period last year.
    • The decline in telecoms revenue was attributed to a dearth in mobile traffic volumes. Fixed voice traffic however went up by 3.2% q.o.q. Telone’s revenue performance for the quarter was not disclosed.

    • Mobile voice traffic eased by 8.9% to 833.6m minutes q.o.q and -5% y.oy.
    • Broadly the topline under-performance was driven by a decline in voice which in turn was weighed down by substitute disruptive products such as OTTs and exacerbated by a softening aggregate demand.
    • Mobile revenue has generally been on a decline since 2014 weighed by voice.
    • Voice remains the overweight revenue line accounting for 59% of total mobile revenue as at Q1 consequently influencing the overall revenue direction.

    • Data accounted for 21.5% of total mobile revenue while mobile money and SMS accounted for 10.2% and 6.8% respectively.
    • The 2 revenue lines data and mobile money have generally experienced a sharp growth over the years albeit coming with relatively lower margins as well as from low bases.
    • Mobile money transactions however performed below the prior quarter in response to the current liquidity crisis. Cash in and cash out transactions eased by 9.8% and 8% respectively.
    • Internet Access Providers generated a total of $45,6m in revenues a growth of 11.4% q.o.q. All categories of postal and courier traffic declined in the quarter under review.




    • Investment by mobile operators declined by 85.4% to record $10,4m q.o.q. Capital commitments have largely been deferred due to international payments gridlocks and cashflow challenges.
    • Only Netone which has accessed foreign funding was more aggressive in capex spend having committed to an additional 23 base stations in the quarter.
    • The total number of mobile base stations, reached 7,808 up from 7,768 recorded at the end the prior comparable quarter.
    • Overall active mobile money agents declined q.o.q in line with the darth in transactions values and the dearth was attributed to to liquidity constraints.

    • On the outlook POTRAZ believes mobile and internet subscriptions will continue to grow albeit at marginal growth.
    • The authority likewise expects mobile to continue to dominating internet use in the country due to the availability and accessibility of 3G.
    • The uptake of fibre is also projected to increase driven by the improved affordability arising out of increased competition.
    • POTRAZ sees Internet and data services driving industry growth in terms of usage volumes while projecting a decline in voice and SMS traffic.

    Our View

    Global developments in the broader technology sphere have highly exposed and disrupted while at the same time creating opportunities for the telecoms sector. In the unraveling, voice, a dominant revenue driver, has been adversely impacted which in itself is a global phenomena. The emergence of OTTs, therefore, can no longer be wished away and the continual advancements in technology will sure bring in more disruptive innovations. In this regard the new battleground becomes the internet (broadband and bandwidth) space where opportunities have instead arisen. The top 5 companies globally offer services which are highly tech driven whereas tech largely relates to internet. Therefore players highly invested in this space will continue to realize exponential growth given the obtaining low internet penetration levels in Zimbabwe. The decline in telcos revenue will in the short term continue to prevail given the higher base from which voice is coming from and the superior margins in that revenue line. The sector’s top player Econet has however demonstrated that given an optimal mix the loss from voice can eventually be countered and stemmed through diversification as shown by the subsiding revenue loss in that company. This however calls for more innovation from telcos and model reconfiguration to mirror more of technology than telecoms. Current gridlocks in foreign payments and the erosion in consumer spend in response to a shrinking economy however pose a ready threat to the sector’s viability. Regulatory mishaps and inconsistency also deter the envisaged sector potential.


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