Zimbabwe lags behind in data services

WITH global leaders in the mobile phone industry moving towards getting most of their revenue from data services, Zimbabwe’s three mobile networks are lagging behind, apparently to maximise on profits, experts say.

Report by Taurai Mangudhla

In its 2012 Global Mobile Market Update, international wireless data and computing solution strategy firm Always On Real-Time Acess (Aorta) reported Japan continued to be the leader in mobile data with an average of 60% of total average revenue coming from data, followed by Australia and the US which registered average data revenues of close to 42% at the end of 2011, while non-messaging data accounted for 53% of the global mobile data revenues owing to the tremendous growth in use of smartphones.

Closer to home in South Africa, a recent research study by The Mobility 2012 released last week showed the proportion the average cellphone user spends on data has increased by half between January 2011 and June to 12%, while spending on voice calls dropped from 77% to 73% in the same period.

Latest reports indicate technology is reducing the cost of data usage on mobile phones. A mobile social network, 2go, has enjoyed phenomenal growth in Africa, having more than nine million users in Nigeria.

2go is a cheap way to chat on mobile social networks and targets users in emerging markets, particularly Africa where people survive on low wages. However, Zimbabwe’s three mobile Networks — Econet Wireless Zimbabwe (Econet), state- owned NetOne and Telecel Zimbabwe (Private) Limited (Telecel) continue drawing most of their revenue from voice calls.

Last month, Telecel announced plans to grow its data business from the current 4,2% of turnover while Econet said 13% of its US$611 million annual revenue for the period ended February 2012 came from data and short message service (sms).

Net One was the last to commission internet services and recently said it plans to immediately expand its broadband coverage across the national grid.  The Zimbabwean trend, a Harare-based ICT analyst who requested not to be named said, was a result of the local industry’s desire to maintain huge profits.

“The 3G providers are not making the cost of data cheaper because they are prioritising selling voice, which has huge profits,” said the analyst who is an executive with a leading local internet service provider.

In a telephone interview with businessdigest, ICT minister Nelson Chamisa said while data uptake could be much higher than current levels, market information was inaccurate due to lack of measuring capacity.

“The problem is we don’t have a mechanism to capture accurate statistics. In 2009 our Internet penetration stood at 1,3% and now it is over 26% and this does not include tablets and mobile phones,” he said.

The ICT minister said the current pricing regime was uncompetitive, adding that while together with Kenya, Zimbabwe has been named as the developing country with the fastest growth in ICT by the International Telecommunication Union (ITU), there was still need for its people to be educated on data usage.

“That’s why we have been holding awareness campaigns and expos to encourage data usage,” he said.

“I can assure you that by the end of the year data usage will be on a phenomenal upward trend and will be embraced by consumers after we review tariffs. Remember we also invested heavily in infrastructure, like laying fibre optic cables and we will soon reap the benefits,” Chamisa added.

Pricing of ICT products has been a major challenge for Zimbabwe in an environment where most of the population is either unemployed or living below the poverty datum line, which is currently around US$570.

According to Freedom House’s Freedom on the Net 2012 report, there are many practical obstacles that hinder citizens’ access to internet services, including high prices and limited infrastructure.

Freedom House said the rates charged for pre-paid mobile web access by Telecel, Econet and NetOne are US$0.11, US$0.15 and US$0.10 per megabyte, respectively, making NetOne the cheapest.

“Low bandwidth has also made internet connections extremely slow in Zimbabwe (and) even in urban areas, electricity is regularly rationed, and the penetration of both the internet and mobile phones is uneven,” reads part of the report.

At the end of 2011, the ITU reported, Zimbabwe had the third highest mobile phone tariffs in the world.

In terms of fixed telephony tariffs, Zimbabwe, with one fixed state-owned operator Tel One, was ranked the sixth most expensive. The country’s mobile-cellular tariffs as a percentage of Gross National Income per capita of US$360 was 68,3 %, ranking third after Niger and Malawi.

ITU said Zimbabwe’s Econet, Net One and Telecel were amongst the world’s most expensive mobile telephony network providers.

According to the report, on-net calls cost an average US$0, 23 per minute in Zimbabwe whilst off-net calls and sms messages are US$0, 25 and US$0,09 respectively.

ITU’s ICT price basket is calculated using the price for fixed-telephony, mobile-cellular telephony and fixed-broadband internet services.

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