Moving forward in Zimbabwe - Brooks World Poverty Institute - The ...

Moving forward in Zimbabwe
Reducing poverty and promoting growth
Figure 9.1: Zimbabwe’s subscriber growth, 2000-2008.
Figure 9.2: Operators’ subscriber growth in
Zimbabwe, 2000-2008.
Source: Supplied upon request from POTRAZ (2009)
Source: Supplied upon request from POTRAZ (2009)
When the data are disaggregated further (see Table 9.1 and
Figure 9.2) they reveal a market dominated largely by one player,
with the others hardly registering any growth at all. By 2008 Econet
Wireless had a 76 per cent market share of mobile subscribers and
60 per cent of total telephone subscribers, including fixed.
Accurate data on effective demand for telephony in Zimbabwe
are not easy to come by, but it is not inaccurate to observe that all
the operators suffered capacity constraints. Demand for telephony
has far outstripped supply, turning the market into a suppliers’
market. Poor service quality, especially network congestion, has
been a feature of telephony in Zimbabwe. Furthermore, the
fact that demand for services far outstrips supply has generated
a thriving black market for the few mobile phone lines available,
which by 2009 retailed at anything between US$50 to US$100.
This compares with other countries, such as Uganda and Kenya,
where mobile lines are ubiquitous and retail at less than a tenth of
the rates found in Zimbabwe. Clearly the crisis created a service
capacity gap that needs to be addressed.
The situation was not helped by The Postal and
Telecommunications Regulatory Authority of Zimbabwe
(POTRAZ), which tried to balance the legitimate demands by
operators for a tariff structure that ensures their viability, with
an equally legitimate obligation to ensure an affordable service
for the consumer. Often, it failed to satisfy either of the parties.
For example, pricing regulations implemented in July 2007 forced
operators to charge the equivalent of US$0.005 (half a US cent)
per minute against an international average of US$0.15. Operators
were not happy with this suboptimum tariff, yet at the same time,
that tariff was beyond the reach of many ordinary mobile users,
whose incomes were no more than US$10 per month.
Operator viability was further hurt by the non-availability of
foreign currency, with the only source being the thriving parallel
(black) market, which was, however, criminalised. Financial results
declared using the official exchange rate would show a deceptively
rosy picture.
Table 9.1: Zimbabwe’s subscriber growth since 2000.
2000 2001 2002 2003 2004 2005 2006 2007 2008
ECONET 93,706 134,000 139,402 151,000 173,000 362,000 477,000 648,908 988,656
NET ONE 89,949 91,800 114,000 117,000 130,000 197,000 215,488 331,000 418,065
TELECEL 82,786 84,690 85,000 95,000 130,000 140,000 156,698 245,746 248,000
TEL ONE 238,956 249,400 257,777 300,921 317,000 328,000 335,561 344,502 364,281
Total 505,397 559,890 596,179 663,921 750,000 1,027,000 1,184,747 1,570,156 1,641,565
Total mobile 266,441 310,490 338,402 363,000 433,000 699,000 849,186 1,225,564 1,296,565
% growth (F) 1 4 3 17 5 3 2 3 6
% growth (M) 65 17 9 7 19 61 31 44 35
Source: Supplied upon request from POTRAZ (2009)
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