HomeBusiness DigestPotraz worried about lack of competition

Potraz worried about lack of competition

Eric Chiriga

ZIMBABWE’S mobile telecommunications players have formed a cartel, leading to poor service delivery due to lack of competition, the Postal and Telecom

munications Regulatory Authority (Potraz) has said.

The telecommunications industry regulator, which is responsible for issuing licences to sector players, said the existing mobile network operators were doing nothing to improve the situation, particularly to meet demand.

“There is very weak competition in terms of price, quality, product differentiation and innovation,” said Hilda Mutseyekwa, who heads the economics, tariffs and competition section of Potraz.

She said mobile lines were flooding the parallel market because mobile network operators were struggling to meet demand.

“We have an awkward situation whereby subscribers jostle for service yet it should be the service providers scrambling for subscribers,” she said.

“The only difference between the service providers is their names,” she said.

The mobile market currently has an oligopoly structure with three licensed operators — Econet, Net*One and Telecel.

The mobile market has a total subscriber base of 832 400.

Econet has the largest market share of 57%, followed by Net*One with 26% and Telecel 17%. In its annual report for 2006, Econet said growth in the telecoms industry was very low. Last year, mobile penetration in Zimbabwe was at approximately 6%.

Mutseyekwa said Tel*One, which has a monopoly in the fixed network sector, was performing poorly.

“Supply is still very limited and confined to the urban centres,” she said.

She said this was coupled with poor and a limited variety of services and weak consumer bargaining power.

“The fixed market has 329 000 subscribers largely concentrated in the urban areas,” Mutseyekwa said.

She said broadband penetration levels for the Internet access provider market were very low.

Mutseyekwa acknowledged that the prevailing economic environment was negatively affecting operations in the telecommunications industry.

“High interest rates have impacted negatively on investment in the sector,” she said.

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