Internet subscriptions decline


Simba Rushwaya

Active internet and data subscriptions have declined by four percent to reach 8.267.268 in the second quarter of the year from 8.614.009, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has said.

As a result, the internet penetration rate declined by 2.4 percent to reach 56.7 percent from 59.1 percent.

According to a report by POTRAZ, revenue generated by the mobile telephone networks grew by 45.8 percent to record $3b from $2.1b. At the same time, total mobile network operating costs grew by 217.7 percent to record $16.1b from $5.1b.

“The growth in revenue is attributable to the increase in tariffs as well as the growth in internet and data usage. The growth in mobile internet and data usage is attributable to increased telecommuting by the work force due to the COVID-19 restrictions.

“The general populace`s interest in global Covid-19 news and updates could also have contributed to the growth in mobile internet and data consumption.

“In-bundle data usage grew from 91.8 percent to 94.1 percent as consumers chose to maximise their utility with the cheaper promotional bundles instead of out-of-bundle data rates.”

Internet Access Provider (IAP) revenues grew by 52.2 percent to record $1.15b from $754.3m million while total operating costs for IAPs grew by 188.4 percent to reach $11.2b from $3.9b.

Total postal and courier revenue declined by 2.1 percent to reach $69.4m from $70.9m in the first quarter of the year, while the total operating costs grew by 13 percent to reach $58.7m from $51.9m.

Fixed voice traffic declined by 27.8 percent to record 80.9m minutes in the second quarter of 2020 from 112.1m minutes.

Unlike the fixed network, voice service is still the biggest contributor to the bottom line of mobile operators.

However, in the quarter under review, the contribution of voice declined in line with the decline in mobile voice traffic.

Operating costs, exclusive of foreign currency losses, grew by 42 percent whereas operating costs inclusive of foreign currency losses grew by 217.7 percent.

Mobile internet and data traffic increased by 56.2 percent to record 10,407TB from 6,661TB.

One Money was the only operator to record growth in mobile money subscriptions as it posted 4.8 percent growth. 

Econet and Telecel lost market share by 4.6 percent and 0.2 percent, respectively, in line with the decline in their active mobile money subscriptions.

The decline in active mobile money subscriptions is attributed to depressed demand in the economy. The deactivation of some agent lines accused of participating in illicit financial activities in May also contributed to the overall decline.

Total mobile voice traffic declined by 1.2 percent to record 1.31b minutes from 1.33b minutes, while postal and courier volume declined by 79.7 percent to record 272,881 items from 1,342,957.

“International courier volumes, which are a major source of income for postal and courier operators, declined significantly as people and businesses resorted to sending documents electronically.

“There were also challenges in channeling items to and from several destinations because of lockdown policies in different countries,” said Potraz.

According to the Universal Postal Union, cross-border exchanges worldwide have dropped by 21 percent since the outbreak of the COVID-19 pandemic.

Cash-in and cash-out transaction also declined and this is attributable to the cash shortages in the economy. On the other hand, there was considerable growth in the value of cross-network as well as airtime, bill and merchant payments.

“The growth in the value of bill and merchant payments is attributable to a number of factors such as the increase in the scope of services that can be paid through mobile money as well as the general increase in the prices of goods and services.

“The national lock-down also necessitated the remote payment of goods and services via electronic channels such as mobile money,” said the report.

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