Telecel Zimbabwe, which operates in a market dominated by
telecoms billionaire Strive Masiyiwa’s Econet, along with state-run NetOne,
slipped into turmoil in May, as a trade union pushed for it to be placed under
administration.
Ramifications of the turbulences were telling in the Postal
and Telecommunications Regulatory Authority of Zimbabwe (Potraz) 2023 fourth
quarter data, which showed Telecel surrendering 7,3% of its active subscribers
to close at 281 332 from 303 364 during the third quarter.
The data showed Telecel was the only loser, after the
Zimbabwe Stock Exchange-listed Econet added 1,2% subscribers during the period
to maintain its market dominance with 70% of the 14,9 million subscriber
sector.
“Telecel’s active subscriber base continued on a downward
trend as evidenced by a 7,3% decline in active subscribers,” Potraz said in its
22-page report.
“Conversely, NetOne and Econet grew in subscribers by 1,9%
and 1,2%, respectively in the quarter under review. The sector recorded 14 973
816 active mobile subscriptions in the fourth quarter of 2023.
“This translates to a 1,2% increase from 14 794 579
recorded in the third quarter.
“As a result, the mobile penetration rate grew by 0,2% to
record 97,7% from 97,5% recorded in the previous quarter. NetOne gained
subscriber market share by 0,2% in the fourth quarter of 2023, whilst Econet
and Telecel lost theirs by 0,1% each.
“However, Econet continued to dominate the market in terms
of subscribers with close to 70% share of the total subscribers,” it noted.
The report said combined mobile telecoms sector revenues
hit ZW$1,1 trillion during the review period, rising 35% from ZW$851 billion
during the third quarter.
Capital expenditure grew 245,6% to ZW$117,1 billion during
the review period, compared to the previous quarter.
“Total operating costs grew by 62,3%, a margin that
surpasses revenue growth by 27,8%,” Potraz said.
“This shows a decline in revenue-to-cost ratios (RCRs),
which indicates that operating costs are closing in on revenue, which can pose
operational challenges.
“Nominally capital expenditure grew by 245,6% in the
quarter under review. However, in real terms this may not reflect significant
growth in mobile operator investment due to hyperinflation,” it added.
Potraz said total mobile traffic, which is measured in
minutes, fell by 7,6% during the review period.
The report did not give reasons for the slide.
But the domestic mobile telecoms market has been rattled by
relentless troubles in the past year.
In the end, subscribers grappled with serious network
gridlocks across platforms, with voice calls taking several times to connect.
Efficiencies in data transmission were also affected.
Operators say they have been affected by foreign currency
problems to import capital equipment.
But in the past few months, tariffs have generally swung
towards United States dollars in line with trends taking place across markets.
Consumers hope with dollarisation taking root, service will
improve.
But it is not clear if Telecel will have the muscle
required to pull back its deserting
customers, having gone through phases of damaging bad publicity in the past few
years.
Chairperson, James Makamba sprang to the network’s defence
in May, dismissing, reports that the operator had been placed under “corporate
rescue proceedings”, following an announcement in the Government Gazette dated
May 12, 2023.
This was after the Communication and Allied Service Workers
Union of Zimbabwe approached the High court seeking an order to begin corporate
rescue proceedings.
Makamba dismissed the notice as nothing, but a legal
nullity.
“It is noted by the board with extreme concern that a
gazetted notice was published on Friday May 12, 2023 to the effect that
corporate rescue proceedings had validly commenced,” he said.
“This is not accurate or true. Telecel Zimbabwe (Pvt) Ltd
wishes to assure the public, stakeholders, creditors and all interested Telecel
persons that it continues to provide its services as normal.
“An invalid legal process by the Communication and Allied
Workers Union of Zimbabwe was lodged in the High Court of Zimbabwe under HC
306/22 in October 2022 through Gumbo & Associates.
“That application was opposed. The outcome of those
proceedings awaits a set down date to determine the validity and the merits.The
notice as published in the Gazette is considered a legal nullity.
“All interested stakeholders, including the public, our
customers and creditors, are assured that there is no valid basis to assert
that Telecel is unable to discharge payments of any valid debt or is incapable
of discharging its service provisions to the public, beyond the normal
constraints exerted by the current tough operating environment,” Makamba said. Zimbabwe Independent
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