2016 Zimbabwe - Telecoms, Mobile and Broadband - Statistics and Analyses

Zimbabwe’s telcos agree to mobile and fixed network infrastructure sharing

Zimbabwe’s economy has seen a downturn since the fractious elections of July 2013, resulting in a significant fall in GDP growth. The contribution to GDP from the telecom sector has fallen steadily as a result. Sector revenue has come under pressure from a number of recent regulatory measures and taxes imposed by the cash-strapped government. Nevertheless, the telecom sector shows some promise, particularly from the mobile sector where mobile penetration has increased rapidly, approaching 110% by mid-2016. The three mobile network operators Econet Wireless, NetOne and Telecel Zimbabwe continue to invest in network upgrades to support data services and their fast-expanding m-commerce and m-banking facilities. Telecel was recently acquired by the government from VimpelCom, and the financial demands required for investment has jeopardised resources potentially available to the incumbent telco TelOne, (formerly PTC), which still holds a de-facto monopoly on fixed-line services in the country. Plans to privatise up to 60% of TelOne and NetOne, either through an IPO or a strategic partnership with a foreign investor, remain on hold.

Limitations in international bandwidth for the landlocked country for many years held back development of the internet and broadband sectors, but this has changed since fibre optic links to several submarine cables have been established via neighbouring territories. The expansion of 3G mobile broadband services across the country, and the more recent efforts to provide LTE services, have meant that more than half of the population now has access to the internet. The first commercial LTE services were launched in 2013, while investment in LTE technologies, for which the regulator has assigned spectrum in the 700MHz band, continues. By the end of 2015 mobile internet connections made up 95.6% of all internet connections. The number of LTE connections grew 374% in the year, reflecting the efforts made by Econet and NetOne in rolling out LTE base stations. Internet penetration increased to 48% by the end of 2015.

Growth in Zimbabwe’s mobile market has been hampered by the poor economic climate, exacerbated by recent regulatory measures affecting tariffs and taxes. These burdens have placed greater pressure on network operator revenue, which has jeopardised their ability to invest in necessary network upgrades. Annual revenue has fallen steadily during the last three years, with a near 18% fall in 2015 alone. NetOne and Econet have both invested in LTE services. The sale of the financially troubled Telecel Zimbabwe was completed in mid-2016, with the government now owing the company through its ISP Zarnet.

Key developments:

• TelOne planning to deliver FttP to 100,000 premises by 2018;
• Government acquires Telecel Zimbabwe from Vimpelcom, proposes consolidation of its telecom assets and business units;
• Telcos agree to the government’s infrastructure sharing policy;
• Telecel Zimbabwe launches Telecash mobile money service;
• Government increases licensing tax, imposes additional levies and a customs tax on mobile handset sales;
• Regulator’s plan to allow telcos to renew licences using annual payments opposed by the government;
• Econet expands m-commerce, launches EcoCash Ta! tap and go payment system;
• Regulator adjusts mobile voice tariffs effective from January 2016;
• TelOne planning to deliver FttP to 100,000 premises by 2018;
• Report update includes the regulator’s market data to December 2015, telcos’ operating and financial data for fiscal 2016, recent market developments.

Companies mentioned in this report:

TelOne; NetOne; Econet; Telecel; TeleAccess; Afritell; Liquid Telecom; DataOne; Powertel Communications; Telco Internet; Broadlands Networks; Aquiva; Africa Online; ComOne; Ecoweb; iWay Africa (MWEB); Zimbabwe Online (ZOL); Zimbabwe Internet Service Provider Association (ZISPA); Telecontract; Dandemutande (uMax); Aptics.