AN increase in telecoms tariffs triggered by rising inflation and a weakening economy resulted in a decline in consumer spending, a new report by the country’s telecoms regulator has shown.
According to the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) sector performance for the first quarter of 2023, total voice traffic by the public switched telephone network operator declined by 5% to record 77.4 million minutes in the first quarter of 2023, from 81.5 million minutes recorded in the fourth quarter of 2022.
International voice traffic recorded significant decline in the quarter under review, with international outgoing and international incoming traffic recording a decline of 48.2% and 31.6% respectively. National fixed voice traffic also recorded a significant decline of 4%, emanating from the 3.6% decline in fixed to mobile traffic.
“The decline in fixed voice traffic in the quarter under review may be attributable to the 50% increase in tariffs in February 2023. Substitution of traditional voice with Over-the-Top VoIP also plays a significant factor. The continuous decline can be attributed to deteriorating quality of service that has seen some places going for days without network,” the report reads.
The total number of active mobile telephone subscriptions, the report further shows, declined 1.7% to reach 14 051 251 as of 31 March 2023, from 14 300 790, recorded as of 31 December 2022. As a result, the mobile penetration rate declined by 1.6% to reach 92.6% as of 31 March 2023, from 94.2% recorded as of 31 December 2022.
Potraz says Econet was the only mobile operator to register growth in active subscriptions. However, the growth was a marginal 0.1%. Potraz expressed concern over a decline on Telecel and NetOne`s active subscriptions over the past five consecutive quarters.
NetOne and Telecel lost subscriber market share by 0.7% and 0.5% respectively, in line with the decline in their active subscriptions. Conversely, Econet gained subscriber market share by 1.2% in the first quarter of 2023.
Net-on-net traffic, the report further shows, has been consistently declining and the trend continued into the first quarter of 2023. As with fixed voice traffic, the decline in mobile voice traffic may be attributable to the 50% increase in tariffs in February 2023. Substitution of traditional voice with over-the-top VoIP also plays a significant factor. The continuous decline may also be attributable to the deteriorating quality of service due to the load-shedding, resulting in lower call-success ratios.
Mobile internet and data traffic increased by 12.3% to record 37 690.4 terabytes in the first quarter of 2023, from 33,576.4 terabytes recorded in the fourth quarter of 2022.
Econet`s market share of internet and data declined by 7.2%, which was gained by NetOne. Telecel`s market share remained unchanged.
“The economic environment directly affects the performance of the postal and telecommunication sector. The inflationary environment, unavailability of credit, reduced consumer spending, inadequate foreign currency amongst other challenges continued to beset the sector,” the report reads.
“The situation has been aggravated by prolonged load-shedding, impacting overall quality of service, and raising the cost-of-service provision. Inadequate foreign currency has affected network expansion and maintenance efforts. Unlike other services that may have alternative local supply, the provision of telecommunication relies heavily on imports mainly equipment, software as well as bandwidth. The sector should be prioritised in terms of government expenditure, resource mobilisation, foreign currency allocation amongst other issues, to fully realise its role as a key economic enabler.”