Zimbabwe’s worsening situation piles on pressure for telcos
Amid Zimbabwe’s rapidly declining humanitarian and economic situation, telecommunication companies are under increasing pressure and have had to raise tariffs while risking lower revenue as local income among citizens struggles to keep up.
With inflation around 800%, companies have tried to pass on increases to consumers, but insiders say this is having a negative effect as revenues are under pressure.
Speaking on condition of anonymity, a manager with a local telecom company told ITWeb Africa on Wednesday: “Subscribers can’t keep up with inflation and this is why some operators are limiting the scale of tariff adjustments; you end up achieving the opposite of what you intend as revenue lines are under immense pressure from the operating environment.”
Mobile operators have in the past few days hiked data, text and voice tariffs, although some executives believe the new charges are still sub-optimum.
A NetOne subscriber queried: “Can someone at NetOne tell me if they are in a different economic environment with Econet or ZOL because their pricing is ridiculous. 25GB going from 950-2500 (USD11-31 on auction rate and USD10.55-27 on black market rate) please tell us which rate is being used as well?”
NetOne responded to complaints and stated: “This increase is due to an increase in our operating costs that keep on increasing due to the economic environment we are operating in. We believe this increase will enable us to continue to provide the quality and breadth of service you love,”
Regulatory uncertainty has impacted Econet, which has not been able to release its results for its February 2020 year-end period.
“Econet Wireless Zimbabwe Limited (the “Company”) wishes to advise our shareholders and the investing public that there will be a delay in publishing our audited financial statements for the financial year ended 29 February 2020,” said Econet in a recent statement.
“Cassava has delayed publication of their results due to ongoing regulatory reviews on EcoCash (Private) Limited, a key subsidiary of Cassava, which are a matter of public record,” the company added.
The company is now expected to provide an update on the new date of release for the company’s financials by September 30.
The ongoing shortage of forex makes it difficult for operators to sustain network availability and quality.
Economist Moses Moyo said: “The economy is worsening and the humanitarian situation is also imposing further economic disruptions as purchasing power goes down with citizens now reliant on donor handouts which means that they will also not be able to spend on communication.”