Telecommunications Sector in Zimbabwe Still Open to Investment according to TOAZ


The Telecommunications Operators Association of Zimbabwe (TOAZ) said last Tuesday there remained significant scope for possible investment in the telecommunications sector in the country.

TOAZ chairman, Douglas Mboweni told New Ziana the current regulatory and economic environment, however, presented challenges for the sector, particularly availability of foreign currency. The country is facing critical foreign currency shortages, which have left the sector battling to keep up with technological advancement. For example, over 90 percent of investment in building up capacity is in the form of foreign currency, Mboweni said.

"There remains significant scope for further investment in various sectors of the telecommunications industry in Zimbabwe. "The country has made significant strides in telecommunications investment, but still lags many of its peers in Africa and much of the developing world in terms of investment in new technologies," he said.

He said, as a result of the challenges, mobile penetration in Zimbabwe was only 10 percent against 40 percent for Africa. "We can only lift our average (penetration) with investment into expansion programmes," he said. The association, he said, was in constant dialogue with regulatory authorities with a view to creating a more favourable regulatory environment that would stimulate investment.

Meanwhile, Mr Mboweni said the association was in continuous engagement with the National Incomes and Pricing Commission and the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) regarding tariff reviews. Tariffs are currently being reviewed after every three months, a move that is impacting on the operations of mobile and fixed telecommunications companies.

POTRAZ is using the Costing International Telecommunication Union (Cositu) model for billing. The system takes into account operational costs incurred by service providers, such as the cost of the traffic itself, network expansion and movements in the exchange rate and inflation.

In a hyper inflationary environment, the tariffs were, however, being "rendered useless" before they are subsequently reviewed. Mboweni, who is also the chief executive of Econet Wireless, said tariff controls had the effect of restraining service providers from realising their full potential in terms of earnings growth.

The Herald Harare