Econet loses market share

ZIMBABWE’S leading mobile network provider Econet Wireless (Econet) — whose revenues and profits significantly dropped last year—lost 3,3% subscriber market share to its main competitor NetOne last year as the state-owned operator’s US$219 million Chinese-funded expansion project bears fruit, an official report shows.

Taurai Mangudhla

NetOne got a US$218,9 million loan from China Exim Bank to fund its expansion project.

Latest information obtained from the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) report for the fourth quarter of 2015 shows the country’s smallest mobile network operator, Telecel, also lost subscriber market share to NetOne during the year.

According to Potraz, Econet’s subscriber market share stood at 55,8% in the first quarter of 2015 before dropping to 55,5% in the second quarter of the year. Econet’s market share went down 1,6 percentage points in the third quarter of 2015 to 53,9% before sliding further to close the year at 52,5%.

Losses were also recorded at Telecel.

The company opened 2015 with 17% of market share, closing the year at 15,1%, while NetOne grew from 26,7% in the first quarter of 2016 to close the year at 32,4%.

NetOne registered the highest growth in active subscribers between the third and final quarter of 2015 at 8,8%, while its two rivals both registered a modest 0,3% increase in active subscribers during the same period.

An active subscriber is defined by Potraz as one who has used the network at least once in the last three months for making or receiving a call or carrying out a non-voice activity such as sending or receiving an SMS or accessing the internet.

“NetOne registered the highest growth in active subscriptions; as a result NetOne gained market share of subscribers whereas Telecel and Econet lost market share,” Potraz says in its report. “An annual review shows that NetOne has been steadily gaining market share over the past year, whereas Econet and Telecel’s market shares have been steadily declining.”

This comes amid serious complaints by subscribers of inflated tariffs, poor service delivery and bad customer experience.

Subscribers, particularly those on the Econet platform, claim their airtime and data bundles disappear even before being utilised. This has put mobile network operators’ business practices, pricing structures and billing systems under scrutiny. This week, ICT minister Supa Mandiwanzira said deafening public complaints have prompted government to start considering punitive measures against network providers who offer shoddy services and rip-off clients.

Mandiwanzira also said government was in the process of establishing a consumer center under Potraz.

The total number of mobile subscriptions increased by 2,2% to 19,5 million from 19,1 million recorded in the previous quarter, while active subscriptions increased by 2,9% to 12,8 million from 12,4 million recorded in the previous quarter.

According to the report, the total national voice traffic declined by 5,7% to record 1 189 942 667 minutes from 1 262 513 445 minutes recorded in the previous quarter as more subscribers turn to cheaper forms of communication such as WhatsApp and Facebook due to dwindling disposable incomes after a combination of company downsizing, closures, salary cuts and retrenchments.

Mobile data usage went up 27,4% to record 1,203,378,839MB from 944,268,192MB recorded in the previous quarter mainly driven by WhatsApp and Facebook bundles which accounted for 34% and 3% of mobile internet data usage respectively.

Mobile internet made up 95,6% of total internet subscriptions.

“Since the introduction of WhatsApp and Facebook bundles by the mobile operators a lot of data has been consumed through these over the top (OTT) packages as bundles,” Potraz says.

Net-on-net traffic declined by 6% largely owing to reductions in traffic experienced between NetOne and Econet.

Telecel’s net-on-net traffic registered an increase, an indication of the latter’s recovery from reduced subscriber confidence associated with its licensing issues.

“The overall decline in net-on-net traffic is largely attributable to the proliferation of OTTs. OTTs continue to proliferate despite discounted net on net tariffs in the form of promotions,” Potraz says.

Mobile data usage also inspired a 4,7% growth in total revenue to record US$191,1 million, up from US$183,2 million in the previous quarter.

The country’s fixed tele-density increased by 0,1% to reach 2,6%, while the internet penetration rate rose by 1,5% to reach 48,1% in the quarter under review.

The mobile penetration rate grew by 1,3% to reach 95,4%, the Potraz report says.

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