RBZ urged to prioritise telecoms

The Herald

Michael Tome Business Reporter

THE Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has implored the Government to prioritise foreign currency allocations to mobile network operators as operating costs continue to escalate and run ahead of revenue.

According to Potraz, the current economic environment is proving to be a big challenge for operators in the sector, with the authority calling for intervention at both the operator and fiscal levels.

The relentless increase in prices has seen market players lose revenue in real terms as working capital needs continue to grow at a rate that exceeds income,  leading to reduced network investment.

Consequently, this has resulted in reduced capital expenditure in US dollar terms in the first quarter of 2022.

In a statement accompanying the telecoms first quarter performance report, Potraz director general, Dr Gift Machengete said the prevailing challenges called for policy and strategic interventions at both sector and national levels.

“Monetary authorities should consider foreign currency prioritisation of the sector considering the capital-intensive nature of the ICT sector,” said Dr Machengete.

The telecoms regulator said the current economic climate was characterised by depressed consumption and foreign currency constraints, which have manifested through reduced traffic volumes.

ICT expert Rungano Chihonde weighed in saying,” The Telecoms industry is highly dependent on imported equipment and accessories which makes it eligible to be on the RBZ’s foreign currency allocation priority list.”

According to Potraz’s first quarter performance report, mobile internet and data traffic declined 14, 9 percent after a total of 22 052 Terabytes of mobile internet and data were consumed.

The decline in internet and data traffic was experienced across all three mobile networks due to declined data affordability.

The dip in demand for mobile data is also attributable to receding Covid-19 lockdowns, which have seen the resumption of physical interactions over virtual.

However, the total number of active internet and data subscriptions increased by 1 percent to 9 644 271 as of March 31.

Mobile voice traffic declined by 2, 3 percent to 1, 77 billion minutes in the first quarter. Total mobile network revenue stood at $28,8 billion, a 10 percent increase from $26,2 billion recorded in the fourth quarter of 2021 with voice contribution to revenue declining to 42 percent while mobile data grew to 39,3 percent from 38, 1 percent.

Operating costs grew by 22, 7 percent to $17 billion from $3, 1 billion recorded in the fourth of 2021.

Bandwidth costs, staff costs, and depreciation continued to be the main cost drivers for mobile operators

Mobile network operators saw a decline in voice and internet traffic in the first quarter but revenue grew 10 percent to $28, 8 billion from $26, 17 billion recorded in the preceding quarter.

With 1, 1 percent growth, Econet was the only mobile network to record growth in active subscriptions while NetOne and Telecel recorded declines of 1, 1 percent, and five percent respectively. For NetOne, this is the first quarter over the past year to record a decline in active subscriptions.


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