Zimbabwe telecoms Q1 revenue falls 15 pct

Mergers, Acquisitions and Financial Results

Zimbabwe’s telecoms sector has reported a 15 percent decline in revenue to $213 million for the first quarter of the year compared to the preceding quarter as consumers migrated to lower priced platforms, a regulator’s report has shown.

In its postal and telecommunications sector performance report, the Postal and Telecommunications Regulatory Authority of Zimbabwe  (Potraz) said during the quarter under review, total mobile traffic declined by 20.7 percent to 1,9 billion minutes from 2,4 billion minutes registered during the previous quarter.

This comes at a time when the voice market is nearing saturation, while internet services show strong growth. Mobile penetration was at 106.4 percent, up from 104.4 percent in the previous quarter.

By the end of the first quarter, the internet penetration rate had increased by 1.4 percentage points to reach 43.1 percent from 41.9 percent recorded in the preceding quarter. Zimbabwe has, since dollarisation, recorded an exponential growth in internet penetration. The uptake of internet services stood at 1.3 percent in 2008.

The intra-network traffic contributed 73.9 percent to the total traffic. Despite the promotions on calls terminating within the same network, traffic within the same operator declined considerably by 16.9 percent from 1.7 billion minutes to reach 1.4 billion minutes recorded in the previous quarter, the report showed.

In the quarter under review there was a 1.9 percent growth in mobile subscriptions to reach 13,9 million subscribers from 13,633 million subscribers recorded in the fourth quarter of 2013.

Econet recorded the largest subscriber market share of 65.3 percent gaining 1.3 percent market share from the previous quarter. Telecel lost 1.2 percent to 17.7 percent from the previous quarter. This was due to the 119,190 reduction in Telecel’s subscriber base. On the other hand, NetOne lost 0.1 percent of its subscriber base.

“The total revenue from telecommunications activities generated by the mobile operators in the first quarter of 2014 was $213,103,525. This represents a 15 percent decline in revenues from $249,990,295 recorded in the previous quarter,” Potraz said.

“Total investment was $27,908,609. This represents a 53 percent decline in investment from $59,097,088 recorded in the previous quarter.”

There was a 7,2 percent increase in fixed lines during the quarter, to 326,183 lines from 304,162 lines in the previous quarter, the first increase in a year, Potraz said.

The total revenue generated by Internet Access Providers declined by 3.1 percent to reach $27,595 million from $26,752 million recorded in the previous quarter. Investment by IAPs was $10,781 million the report shows. This implies a 33,4 percent increase in quarterly investment from $8 million recorded in the previous quarter.

“The telecommunication sector has shown a positive trend over the period. The robust growth reported in the data/internet market is an indication that this is the next frontier for service diversification by the operators as the voice market nears saturation,” Potraz said.

“This is likely to intensify competition and foster service innovation in the telecommunications sector. Operators continue to investment heavily in data and internet services mainly through optic fibre expansion projects. This is evidenced by the increase in available international bandwidth as a result of national backbone optic fibre expansion. Postal and courier mail volumes declined; the challenge for the sector is to modernize operations and to diversify products and service offers.”

Potraz said  the number of letters posted locally declined by 8.4 percent to 3,165 million letters down from 3,457 million letters in the preceding quarter, while the number of courier items sent during the quarter decreased by 0.9 percent to reach 354,825 from 357,893 items sent during the last quarter.

“International incoming courier was the only category that registered an upward trend. International incoming courier increased by 0.3 percent to reach 858,834 items from 856,238 items sent in the previous quarter. On the other hand international outgoing courier declined by 4.4 percent during the quarter to record 556,936 from 582,746 letters registered during the previous quarter. The number of postal outlets remained stagnant at 262 outlets,” read the report.