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Zimbabwe regulator explains drop in mobile market revenue

By , Journalist
Zimbabwe , 04 Sep 2015

Zimbabwe regulator explains drop in mobile market revenue

The Zimbabwean state telecommunications watchdog, the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz), says mobile companies ought to be more concerned about the internet and data based applications rather than tariff reductions - this after revenues for Q1 2015 declined by 14%.

Zimbabwe has three mobile operators, Telecel Zimbabwe, Econet Wireless and state owned NetOne.

Executives in the industry say applications such as WhatsApp, Facebook, Viber and others that ride on data, are causing disruptive competition. However, these applications have been incorporated by operators through bundled billing in a bid to diversify revenue streams, specifically away from the traditional voice category which is in decline.

"The decline in revenue cannot be wholly attributable to the tariff reduction, but also to the substitution effect whereby consumers are slowly shifting to internet and data based applications, such as WhatsApp, which are becoming more popular by the day," said Potraz in a first quarter report made public this week.

Zimbabwean telecom operators have taken issue with the regulator, accusing it of destabilising the industry after it instituted a tariff cut earlier this year.

"We all need to try and protect jobs, but regulators like Potraz need to play their part by not unnecessarily destabilising industries that are stable," said Douglas Mboweni, chief executive officer of Econet Wireless last month.

Potraz said the declining usage of mobile voice telephony services in Zimbabwe was "evidenced by the decline in voice traffic processed by the mobile operators and the increase in data traffic and revenue of 7.4%," during the quarter period under review.

It said revenues generated by the three mobile companies in Zimbabwe had fallen 14% to $188 million.

The Zimbabwean fixed phone operator, TelOne, recorded a 19.5% slide in revenues for the same period to $35.7 million, while in contrast internet service providers raised revenues by 7.4% to $33,7 million.

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