Subscriber numbers of Zimbabwe’s second and third largest mobile operators – Telecel and NetOne – ‘jumped’ in the past year, posing stiffer competition for market leader Econet Wireless.
This is according to analysts at IH Securities, a Zimbabwean brokerage and research advisory firm, which has compiled a report studying the state of the country’s telecoms sector.
Econet says it has over 7 million subscriptions; while Telecel says it has 3 million and NetOne maintains it has approximately 2 million network subscriptions. According to the World Bank, Zimbabwe has a population of just over 12 million.
However, gains by Telecel and NetOne in the last year may have eaten into Econet’s market dominance, say IH Securities researchers.
The researchers further say that reasons for Telecel and NetOne’s ‘growth’ include their aggressive use of marketing promotions and reductions in data and voice tariffs.
“We believe Telecel has registered a cumulative increase in subscribers of 67% in the last 12 months, versus a 34% increase in the NetOne subscriber base and a much lower 26% increase in Econet’s subscriber base,” said lead researcher Dzikamai Danha and other analysts at IH Securities.
They said this had resulted in “Econet’s market share falling to 64.9%... from a high of 73%”.
Researchers added that this ‘situation’ has “brought the most significant level of competition” in the Zimbabwean telecommunications market to date.
But Econet is reportedly not sitting back and watching the situation unfold.
“Econet has responded with its own promotions and marketing campaigns and these have decelerated the company’s loss in market share,” say the researchers.
IH Securities says that Econet is also well positioned to access capital from international financiers and lenders, and THAT this could put the company at a greater advantage as compared to its competitors.
Subsequently, the research firm says Econet’s market share is forecast remain above 60% in the short to medium term.
Yet as competition heats up among telcos in the country and promotions take off, the average revenue per user (ARPU) is falling in the nation.
IH Securities says Econet’s average ARPU declined from $ 12.90 in 2010 to $8.50 in 2012. And the analysts say the average Econet Wireless ARPU for 2013 could drop further to $8.13.
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