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Telecoms keeping Zimbabwe’s economic hopes alive

By , Sub Saharan Africa Business, Tech, News and Development Journalist
Zimbabwe , 18 Dec 2020

Increased usage of telecommunication services in Zimbabwe is helping to fuel economic activity across many sectors, with data from the industry regulator showing a substantial increase in internet and voice telephony service usage in the third quarter.

Telecommunications services have largely sustained economic activity and business operations for many companies amid COVID-19.

The high use of telecommunications services has continued after the pandemic reached its peak, and Zimbabwe has started to record increased infection cases.

Gift Machengete, Director General of the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) said yesterday that the “growth in voice traffic (during the third quarter 2020 period) is attributable to the upscaling of business operations and the increased number of workforce back at work” following relaxation of COVID-19 lockdown restrictions during the quarter period.

Under this period, mobile voice traffic increased by 18.7% to 1.5 billion minutes, while fixed voice traffic also increased by 12% to 90.6 million minutes.

“The bulk of fixed voice traffic was generated by corporates lines,” said Machengete.

The Potraz report added that active internet and data subscriptions for the quarter grew by 5.6% to reach 8.7 million compared to the previous quarter’s subscriptions of 8,2 million.

This has helped drive up Zimbabwe’s internet penetration rate by 3.2% to 60%.

However, total active mobile subscriptions declined by a nominal 0.1% to reach 12,7 million during the third quarter period under review.

Nonetheless, the active mobile user numbers are expected to scale up during the current fourth quarter period, boosted by resumption of economic activities in the formal and largely informal sectors.

“Growth in active subscriptions is expected in the fourth quarter as consumption at household and industry level improves following the relaxation of Covid-19 restrictions on the formal and informal sector,” said Machengete.

Despite the upward trajectory of the telecommunications industry, further growth in uptake of internet and voice telephony remains “dependent on the economic environment” obtaining in Zimbabwe.

“Given the dual pricing policy, fluctuations on the foreign currency auction market will have a direct impact on service tariffs for the sector. Operating cost containment will remain crucial for operators to maintain profitability given the current inflationary pressures in the economy,” Machengete added.

Zimbabwean telcos Econet and Telecel have this week hiked voice, data and SMS tariffs while EcoCash, the mobile money spin off from Econet, has announced a tariff increase effective January 2021.

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