Tawanda Karombo Harare
ZIMBABWEAN mobile companies are increasingly investing more into data and mobile money platforms to plug the gaping hole left by reclining revenues from the voice category, with Econet, owned by businessman Strive Masiyiwa, Telecel Zimbabwe and NetOne sinking $46 million (R524m) into the sector during the nine-month period to the end of September.
Experts say growing competition from cheaper communication alternatives such as WhatsApp, Facebook and Viber among other applications is driving down earnings from voice telephony for mobile companies.
This has prompted the telcos to switch their attention to data and other value-added services, with Zimbabwean mobile firms coming up with special social media data bundles.
Industry insiders told Business Report that Econet Wireless is in the process of enhancing its bundled portfolio which rides on the company’s data platforms. Other areas of investment being strengthened include mobile insurance.
“Investment is now increasingly going into data because data now contributes nearly 10 percent of total revenues for most of the mobile companies. The strategy is to grow this category through bundled products and broad options covering most of the platforms,” said a Zimbabwean telecommunications industry executive on Thursday.
Earnings
On the back of increased investment, the three Zimbabwean mobile companies also raised their earnings figures for the nine month period by as much as 9 percent to $247 million, figures from a report by the Posts and Telecommunications Regulatory Authority (Potraz) showed this week.
The increased revenues for the industry have come at a time when most Zimbabwean companies are recording declining profitability and income.
The country’s economy, which has been facing turbulence ever since President Robert Mugabe, who returned home on Thursday from a lengthy holiday stint in the Far East, urgently requires reforms and capital instruments to propel it out of its persistent struggles, experts attending an economic symposium held by the Confederation of Zimbabwe Industries in Harare said.
Potraz said in an industry report for the third quarter period 2014 that active mobile subscriber numbers for the country had now reached 11.4 million. The internet penetration rate, which has driven up mobile and internet transactions in Zimbabwe, has also risen to 47.5 percent.
The Reserve Bank of Zimbabwe said in its first weekly report for the period up to January 9, 2015, that “in volume terms, mobile-based transactions remained dominant, accounting for 89.1 percent of total transactions, followed by ATMs, 6.7 percent; POS, 3.2 percent; RTGS, 0.9 percent; and cheques, 0.1 percent”.
This bodes well for a telecommunications industry that is angling for more transactions to grow its revenue base.
“Mobile network operators (MNOs) are taking advantage of the growing popularity of mobile money to boost average revenue per user and counter the increasing pressure on voice revenues.
“Mobile money services have thus become central to growth strategies of MNOs,” said Frost and Sullivan ICT industry analyst Lehlohonolo Mokenela.
Zimbabwe’s government is also heavily reliant on the telecommunications industry for fiscal revenues after introducing a raft of tax measures aimed for the industry in 2014.
Zimbabwe telecom companies are levied 5 percent on airtime top-ups, in addition to steep licensing fees of more than $137.5 million each.