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Mobile Broadband to Ensure Continued Vibrancy of Zimbabwe’s Telecommunications Market Says Frost & Sullivan - Affordability and high-quality connections to be key considerations for market participants
Mobile Broadband to Ensure Continued Vibrancy of Zimbabwe’s Telecommunications Market Says Frost & Sullivan

 

PRZOOM - /newswire/ - Cape Town, South Africa, 2011/05/09 - Affordability and high-quality connections to be key considerations for market participants.

   
 
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Mobile subscriber numbers in Zimbabwe trebled from early 2009 to mid-2010, whereas fixed line subscriptions remained stagnant. With demand for voice services increasingly met, future growth is predicted to occur around mobile Internet and broadband provision. Both mobile operators and Internet access providers will benefit from this second wave of growth. However, increasing political instability in the run-up to elections expected to be held in 18 to 24 months and a business environment not always conducive to proper process are expected to have a negative impact on market prospects.

New analysis from Frost & Sullivan (wireless.frost.com), An Overview of Zimbabwe's Vibrant Telecommunications Market, finds that the Zimbabwean mobile communications market earned revenues of $372.2 million in 2009 and estimates these to reach $1,343.7 million in 2016. This represents a compound annual growth rate of 20.1 per cent, considerably lower than the phenomenal 40.6 per cent revenue growth experienced from 2008 to 2009. However, declining growth rates are expected when markets become increasingly saturated.

"Mobile operators are the largest contributors to telecommunications revenues in Zimbabwe," notes Frost & Sullivan ICT Industry Analyst Protea Hirschel. "As 3G networks expand, mobile operators compete more directly with Internet access providers. These, in turn, have entered the voice market, adding to competition."

Unfulfilled demand, initially for voice and increasingly for data services, is one of the main drivers of growth for mobile communications. Fixed lines are unlikely to meet this demand in Zimbabwe.

Mobile subscriber numbers trebled from less than two million at the end of 2008 to 6.9 million in mid-2010. The uptake of 3G by subscribers has also been very high and, at the end of 2010, exceeded the number of fixed line subscriptions. Fixed lines have remained stagnant at 390,000, as the incumbent has struggled for resources to maintain its network.

Nonetheless, very high unemployment rates, estimated to be in excess of 80 per cent, mean that consumer spending on communications competes with spending on basic necessities. Affordability, therefore, ultimately constrains average revenue per user (ARPU).

"The success of several promotions over the last 18 months has, however, shown the importance of affordable pricing in Zimbabwe," remarks Hirschel. "Offering subscribers a compelling value proposition will continue to be of importance in this market."

Network quality of mobile networks in Zimbabwe is generally considered to be poor by subscribers. Perceived low network quality has also resulted in a high incidence of multiple SIMs as subscribers hedge their bets between networks.

After the dollarisation of the economy in 2009, network capacity of all mobile operators was unable to keep up with demand from consumers, contributing to poor network quality. Capacity constraints have, to an extent, been overcome at present.

However, erratic power supply remains a significant challenge for all telecommunications operators. Not only does it result in a degraded service experience for subscribers, but it also adds to operating costs as multiple power sources have to be factored into the cost base.

"Networks offering a higher quality service with fewer dropped connections have an advantage over competitors," states Hirschel. "As erratic power supply is a major contributor to poor network quality, decreasing reliance on grid electricity and backup diesel generators by using alternative energy, such as solar wind or hybrid powered base station designs, will result in long-term OPEX reductions. This will also help to preserve profit margins in the long-term as ARPU is expected to decline."

If you are interested in more information on this study, please send an email with your contact details to Christie Cronje, Corporate Communications, at christie.cronje[.]frost.com.

An Overview of Zimbabwe's Vibrant Telecommunications Market is part of the Mobile & Wireless Communications Growth Partnership Service programme, which also includes research in the following markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan (frost.com), the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.

An Overview of Zimbabwe's Vibrant Telecommunications Market / M667

 
 
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Mobile Broadband to Ensure Continued Vibrancy of Zimbabwe’s Telecommunications Market Says Frost & Sullivan

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