Analysts have warned of hard times ahead for Zimbabwean mobile companies and have advised the government against a further tariff reduction which will likely "price" smaller operators out of the market.

Zimbabwe has three mobile operators, Econet Wireless, Telecel Zimbabwe and state run NetOne. The government this year instituted a 35% tariff reduction to 15 cents per minute and has scheduled another tariff cut to 12 cents by January next year, as well as a further cut to 9 cents per minute by January 2017.

Econet has already said its profits for the year to February took a 40% knock as a result of the tariff cut effected this year and duties on airtime top-ups.

Now, analysts at IH Securities have said in a research note that any further tariff reduction will price the smaller mobile operators in Zimbabwe out of the market.

"We hope that the regulator, Potraz, (will maintain) tariffs at this level and not enforce the further reductions in voice tariffs, which were to take effect from Jan 16 and then again in Jan 17.

"For prudence sake we have assumed that the proposed reduction from 15 cents to 12 cents takes place in Jan 16, but believe it is highly unlikely that the tariff will be reduced further as this will most certainly price the other smaller players out of the market," said research analysts at Zimbabwe brokerage company, IH Securities in a report.

The report noted that the ongoing trend towards data will "not be reversed" going ahead and added that the trend was being fuelled by "the proliferation of over the top applications and increased broadband" usage.

"It is a global trend which we believe is accelerated by the macroeconomic climate in Zimbabwe, where consumers seek more value for their money and are therefore prepared to sacrifice the quality and convenience of voice calls in favour of the higher value data bundles," said the analysts.

IH Securities has also said that it is anticipating a "tough financial year ahead for Econet," with revenues forecast to decline 2.5% and a further "30.5% decline in net income to $48.8 million.