Covid-19 decimates postal, courier services revenues

Melody Chikono

THE postal and courier services have been the hardest hit by Covid-19 in the telecommunications sector, with volumes and revenues declining as the global pandemic exacerbated the substitution of paper communication by electronic methods.

A 2020 second quarter (Q2) Postal and Telecommunication Regulatory Authority of Zimbabwe (Potraz) report shows that total postal and courier volumes declined by 79,7% to record 272 881 items from 1 342 957 recorded in the previous quarter.

According to the report, this has been the lowest postal and courier volume the sector has experienced in a long time, after averaging above a million in the previous quarters.

Revenues declined by 2,1% to record ZW$69,4 million (US$849 449) from ZW$70,9 million (US$867 809), while other units revenues surged, while total operating costs by postal and courier operators grew by 13% to record ZW$58,7 million (US$718 482) from ZW$51,9 million (US$635 250) recorded in the first quarter of 2020.

“Postal and courier volumes declined significantly as people and businesses resorted to sending documents electronically. There were also challenges in channelling items to and from several destinations because of lockdown policies in different countries,” Potraz said.

“However, postal and courier volumes are expected to improve in the coming quarters as restrictions are eased globally and industry fully reopens. However, postal and courier volumes are expected to improve in the coming quarters as restrictions are eased globally and industry fully reopens.”

International courier volumes, which are a major source of income for postal and courier operators, declined significantly as people and businesses resorted to sending documents electronically.

There was also a drop in total fixed voice traffic, which declined by 27,8% to record 80,9 million minutes in the second quarter of 2020 from 112,1 million minutes recorded in the first quarter of 2020.

Total mobile voice traffic declined by 1,2% to record 1,31 billion minutes from 1,33 billion minutes recorded in the previous quarter. Given the economic environment, consumers have been inevitably substituting voice service with cheaper over-the-top services such as WhatsApp.

Overall, Potraz said foreign currency challenges continued to affect network deployment and maintenance as spare parts, equipment and vendor support fees require foreign currency.

Furthermore, the credit crunch also negatively affected network expansion. The high cost of international internet connectivity also remained a challenge as Zimbabwe is a landlocked country, accessing bandwidth from undersea cables via Mozambique and South Africa.

However, in the wake of the downturns, the regulator said mobile internet and data traffic increased by 56,2% to record 10,407TB from 6,661TB recorded in the previous quarter.

Used international internet bandwidth capacity also increased by 2,8% to record 128,173Mbps from 124,627 Mbps recorded in the previous quarter. Internet/data traffic will continue to grow due to the increased adoption of e-learning, telecommuting, and e-conferencing.

While the economic environment affects the sector through service demand and consumption levels, operating costs and investment and given the apparent stabilisation of the exchange rate that is emerging,

Potraz said there was optimism that the sector is poised for growth going into the future. Operating cost containment remained crucial for operators to remain profitable.

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