Ballooning inflation bursts Zimbabwe’s mobile telecommunications bubble
Rising inflation has impacted Zimbabwe’s growth in internet usage, with elevated costs of telecommunications forcing a reduction in the volume of data consumed by subscribers in Q4 to December 2021.
In an industry report released Monday, the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) said both data consumption and mobile voice minutes declined, despite an increase in active mobile subscribers.
This mirrors the impact of Zimbabwe’s elevated inflation of over 70% on the mobile telecommunications industry at a time when exchange rate disparities continue to hit the economy.
Zimbabwe has three mobile operators: Econet, state-owned NetOne and troubled Telecel Zimbabwe.
Active mobile subscriptions increased by 2.3% to reach 14.2 million, compared to the previous quarter. This raised Zimbabwe’s mobile penetration rate by 0.9% to reach 94.4%.
According to the Potraz report: “Total mobile voice traffic declined by 14.3% to record 1.8 billion minutes in the fourth quarter of 2021 from 2.1 billion minutes recorded in the third quarter of 2021.”
It added: “Mobile internet and data traffic declined by 3.5% to record 24,991TB from 25,902TB. All the mobile operators recorded a decline in Internet and data traffic.”
The decline in mobile voice traffic has been attributed to a 56.4% increase in mobile voice tariffs in September 2021, with the period being the only quarter to record a decline in voice traffic for the year.
Despite the total number of active internet and data subscriptions increasing by 2.3% to reach 9.5 million, Potraz has blamed the 53.4% increase in mobile internet and data tariffs in September 2021 for the decline in data consumption.
The regulator stated: “Bandwidth costs, staff costs and depreciation continued to be the main cost drivers for the mobile operators. Operating costs have been increasing in line with inflationary pressures in the economy.”
In a bid to promote viability of operators in the industry, industry players are now allowed to charge for their services in foreign currency.