Business Development Science and Technology

3rd Quarter 2022 Postal and Telecommunication Sector Performance Report

Dr. Gift Machengete, POTRAZ Director-General

Address By The POTRAZ Director General, Dr. G. K. Machengete

The Director General of the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), hereby presents the key trends observed in the Postal and Telecommunications sector during the third quarter of 2022 as follows:

 

Growth in subscriptions across all markets

Total active mobile subscriptions increased by 4% to reach 14,562,242; up from 14,006,034. Hence, the mobile penetration rate increased by 3.6% to reach 95.9%, from 92.3%. Total active Internet and data subscriptions increased by 4.3% to reach 9,700,385, from 9,300,560. The Internet penetration rate increased by 2.6% to reach 63.9%, from 61.3%, in line with the growth in active subscriptions. Total active fixed telephone lines increased by 2.8% to reach 290,810 from 282,843; hence, the fixed teledensity increased by 0.06% to reach 1.92%, from 1.86%.

Growth in Internet & data usage

Internet and data usage has been consistently increasing, owing to a more digitalized economy. Mobile Internet & data traffic totalled 32,473.1 Terabytes in the third quarter of 2022, representing a 26.1% growth from 25,755.9 Terabytes recorded in the previous quarter. Used Incoming International Internet Bandwidth Capacity also increased by 4.3% to record 23O,677Mbps, from 221,181Mbps recorded in the second quarter of 2022.

Growth in Mobile Voice Traffic & Fixed Voice Traffic

Mobile voice traffic totalled 3.08 billion minutes. This represents a considerable 31.2% growth from 2.35 billion minutes recorded in the second quarter of 2022. Total fixed telephone voice traffic increased by a modest 1% to record 84.6 million minutes in the third quarter of 2022, from 83.7 million minutes recorded in the previous quarter. The growth in voice traffic is attributable to the growth in subscriptions.

Growth in postal and courier volumes

Total postal and courier volumes increased by 4.5% to record 547,125 items, from 523,342 items recorded in the second quarter of 2022. The growth in total mail volumes experienced in the quarter under review comes after consecutive periods of persistent contraction. The growth could be a sign of recovery for the postal and courier sector.

Growth in revenues and rising operating costs across all markets

Total mobile operator revenues grew by 1O3.9% to record ZWL61.39 billion, from ZWL3O.1 billion; whilst operating costs grew by 97.1% to record ZWL48.6 billion from ZWL24.7 billion. IAP revenues grew by 104.8% to record ZWL3O.86 billion, from ZWL15.O7 billion; whilst operating costs for IAPs grew by 52.9% to record ZWL18.25 billion, from ZWL11.93 billion.

Total revenue generated by the postal and courier sector increased by 49.4% to record ZWL3.9 billion, from ZWL2.6 billion; whilst operating costs increased by 40.5% to record ZWL2.9 billion, from ZWL2.08 billion. The increase in operating costs was less than revenue growth, across all markets.

CHALLENGES

The sector continues to be negatively affected by the inflationary operating environment, unavailability of credit reduced real disposable incomes, and shortage of foreign currency amongst other challenges. The increased load-shedding has posed a serious challenge to operational efficiency, impacting overall quality of service and raising the cost of service provision.

Inadequate foreign currency allocation continues to affect network expansion and maintenance efforts. Unlike other services that may have alternative local supply, the provision of telecommunication relies heavily on imports mainly in the form of equipment, software as well as bandwidth.

INDUSTRY OUTLOOK

The sector has continued to grow as more services move to the digital space, contributing to increased demand and consumption of telecommunication services. This growth has been supported by the availability of the Internet. which is increasingly becoming more accessible across the country. The sector is expected to grow exponentially with increased adoption of ICTs, operator investment and innovation efforts, as well as the Authority’s efforts to close the digital divide.

The sector will continue enabling other sectors as envisioned in Government’s National Development Strategy 1 (NDS1). One main hurdle to overcome in the remainder of the year is the pressure on the profitability and overall financial sustainability of the sector. As this report has shown, although operating revenue increased in the third quarter of 2022, expenditure also rose across all subsectors. Prioritisation of the sector in terms of government expenditure, power availability, protection against vandalism, resource mobilisation, and foreign currency availability amongst other issues, is pertinent.

There is still great scope for the postal and courier sector. As the world becomes ever more connected and digitized, the postal and courier network, with good quality-of-service standards and practices. can serve as the physical connector of choice for e-commerce. However, this will require greater financial commitment from the government, more tailored regulation, improved performance by operators, more consumer awareness programs, and greater interoperability with other sectors.

 

The Director-General, December 2022

About the author

Byron Adonis Mutingwende