Zimbabwe: Econet Fourth Quarter Traffic Volumes Tumble

16 January 2020

Leading mobile telecommunications company, Econet Wireless Zimbabwe saw traffic volumes for all its communication platforms- voice call, data and short message service (SMS) plummet owing to an upward tariff adjustment put in place last October.

In its latest trading update for the nine months to November 2019, the company endured a traffic decline in voice calls of 8 percent, a -30 percent in data and -35 percent in SMS platforms as compared to the previous quarter.

"Traffic volumes declined from the previous quarter following the headline tariff adjustments in August 2019 and October 2019," the company said.

However, due to inflationary development in the economy, the tariff adjustment last October has since been eroded by inflation and hence compromising the company viability going forward.

In October, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) approved a 95,39 percent voice, data and SMS tariff adjustment for mobile cellular and fixed network operators.

In the same month Econet increased its voice tariff by 98 percent to $0.963 per minute from $0.486 per minute, while data and SMS prices went up to $0.1926 per MB and $0.2440 per SMS respectively.

"Although tariff increases were approved by POTRAZ in August and October 2019, our tariffs continue to lag behind inflation and given the rapid local currency depreciation since February 2019, the tariffs are now at sub-economic levels," Econet Group secretary, Charles Banda said.

Telecommunication companies are seeking for an upward review of tariffs from the regulator citing operational incapacitation from the current tariff.

Analysts say it's a catch-22 for the telecommunications sector which is already suffering a decline in traffic volumes of services as the current tariff is still too high for the majority of Zimbabweans struggling to cope with severely depleted disposable incomes in the current inflationary environment.

Econet is however in the process of deploying solar equipment and hybrid batteries at its base stations and switching centres to alleviate effects of erratic grid power supply and escalating fuel costs.

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