Drop in subscriber numbers leaves Zim telcos scrambling
Mobile telecommunications companies in Zimbabwe may have to bolster promotions to retain subscribers as consumers continue to feel the pinch of a struggling economy, exacerbated by COVID-19 and lockdown measures.
The country has three mobile operators that include state-owned NetOne and Telecel Zimbabwe, as well as ZSE-listed Econet Wireless.
Industry regulator the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) said on Wednesday that “subscriber retention will be crucial for operators” going forward.
“A number of promotions, especially on declining voice services, are likely to be offered to retain customers, drive usage and improve the ARPU,” said Potraz director general, Gift Machengete.
In an industry update for Q2 2020, the regulator stated that although mobile internet and data traffic increased by 56.2% to record 10.4TB from 6.6TB in the previous quarter, internet subscriptions and active mobile user numbers had declined. Mobile voice telephony service volumes were also falling.
“Total mobile voice traffic declined by 1.2% to record 1.3 billion minutes,” said Machengete.
Telecommunications companies are are already running promotional offerings for voice and data.
Industry executives have told ITWeb Africa that the magnitude of promotions they can offer is limited by the economic environment and sub-optimum tariffs which are regulated by the government.
A manager at one of the telecommunication firms, who spoke on condition of anonymity, said: “There are a number of promotional offerings to try and bring back value to subscribers but for most players there is only so much they can do. Their options are limited because of two main issues; sub optimum tariffs and the environment which is very challenging and which is forcing people weigh other needs ahead of telecom services.”
The total number of active mobile subscriptions for the quarter under review also declined by 6.7% to reach 12.7 million from 13.7 million. This forced a drop in the mobile penetration rate for Zimbabwe by 6.4% to 87.8%.
According to the executive, more Zimbabwean telecom users “have been inevitably substituting voice service with cheaper over the top services such as WhatsApp” owing to the tough economic environment, worsened by COVID-19 restrictions.
This may also explain why data consumption volumes increased during the quarter under review, despite the 2.4% decline in internet subscriptions and the internet penetration rate for the country to 56.7%. This was after active internet and data subscriptions declined by 4% to record 8.2 million from 8.6 million.
Machengete added: “The decline in active internet subscriptions in the quarter under review may be attributable to the depressed demand in the economy at both household and industry level. Covid-19 had a direct impact on the operations of both the formal and informal sector, thus negatively affecting disposable incomes.”