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Telecel Zimbabwe loses 130,000 subscribers in three months. What lies ahead?

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telecel-simSecond quarter financial results released by parent company, Vimpelcom, show that Telecel Zimbabwe just lost 130,000 active subscribers in the 3 months since the first quarter of the 2014. Considering the company had lost 111,000 subscribers in the first quarter, this means a collective 241k active subscribers lost so far this year. In the second quarter Telecel had 2,329,000 subscribers, down from 2,459,000 subscribers the operator had in the first quarter.

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Zimbabwe’s Economic slowdown

We contacted Telecel Zimbabwe for comment, and a director a the company, Obert Mandimika,  told us the biting economic situation in the country has meant that subscribers that had multiple sims are finding it hard to maintain all subscriptions and are instead choosing a single network to stick to.

“Our analysis indicates that a lot of customers have been rationalising their multiple SIM holding and choosing to have a specific line instead of holding too many from other networks as it is now difficult to recharge and maintain all of them due to low disposable incomes,” Mandimika told us.

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He explained more: “Our case was compounded by the fact that we also rationalised one of our major product offerings, the Super Voice Bundles, at that same time, and some of our marginal low-end bargain seeking customers left the network. However, the core of our subscriber base remains intact.”

If it’s indeed the case of multiple sim subscribers going single sim then Zimbabwe’s mobile penetration has effectively started to drop, to realistic levels.

The plan?

On how they’ll fix the situation, Telecel indicates the company is doing an about turn on what has been a strong component of the identity; low cost calls for frugal spender. They have learnt over the past couple of years that frugal saves never actually leave their core network and that they just use Telecel for the free airtime promos. This doesn’t help Telecel’s bottom line as they need subscribers spending more overall.

While the company will still have some promos, Mandimika told us that as an organisation, they have also decided “it is better to have focus on improving subscriber loyalty and ARPU (Average Revenue per User) improvement where it is quite acceptable for us to have fewer subscribers but with a higher spending level than to attract those that constantly switch their network based on bargain of the moment only.”

WhatsApp and Facebook Bundles?

We’re guessing that most of the subscriber bleeding was caused by WhatsApp and Facebook bundles offered by Econet. Econet, since October 2013 and February 2014 respectively, has allowed its subscribers low cost bundled access to Facebook and WhatsApp.

Telecel only introduced WhatsApp bundles late at the end of the second quarter and by the time, they’d probably lost a good number of subscribers already. Telecel still doesn’t offer the equivalent of Econet’s Facebook bundles, preferring instead Facebook Zero, which doesn’t look as attractive.

The problem for Telecel is that Econet’s bundles are working very well for it, a sign Econet won’t stop introducing more bundled app services that will likely attract more and more of Telecel’s subscribers to Econet. Take the free Twitter access for example that has just been extended to November.

Not big on financed smartphones

Telecel would likely say they don’t care much for the cheapskates looking for cheap WhatsApp and Facebook bundles coz this is the same lot that looks for free calls, but the fact is the high spenders also want to be taken care of and one of the key ways to do that is to have financed high end devices.

Telecel hasn’t been focused on financed devices at all, or at least not as much as their cousins at Econet have. Telecel devices were bundled with the Telecel Red packages but Telecel didn’t put forward new devices and didn’t have great deals on the few devices they had. They still don’t have the Galaxy S5 for example. No iPhone 5s. And for the devices they have, like the Galaxy S4, because the payback period is 12 months (compared to Econet’s 24 months), the monthly subscription is an enormous US $100.

The only way to keep high spenders on the network and to ensure they do spend high is to give them an expensive device at a very low margin and have them pay it back over 2 years along with a compulsory monthly minimum airtime, and data spend.


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35 thoughts on “Telecel Zimbabwe loses 130,000 subscribers in three months. What lies ahead?

  1. guys lets be honest. telecel reports active while ewz reports registered.

    see below

    Good day Customer,

    We acknowledge receipt of your email and thank you for writing to us.

    To replace a lost/stolen sim card, you need to be the registered owner of the line and report loss/theft at your nearest police station to obtain a police report with a reference number. Afterwhich you may visit an Econet shop with the following documents:
    · Police report
    · Copy of National ID document
    · $1 replacement fee per Sim card

    Please note however, upon checking the numbers you supplied, xxxxxxis not registered in your name and you are therefore unable to replace it unless you change line ownership. The remaining lines are registered in your name though currently inactive due to none use but can still be reactivated after replacement.

    For lines already registered, visit an Econet Shop with the following documents to verify whether correct and updated details are present on your account:
    · National ID,
    · Proof of residence(utility bill, lease agreements, affidavit from landlord or letter of employer proving permanent address)

    Please note that lines not properly registered by the 13th of July 2014 will be deactivated from the network.

    For further enquiries with regards to this Thank you for your continued support

    1. It’s always been a big question yes on whether the 3 mobile operators report the same thing. We wish POTRAZ would clarify these things.
      In the article, we didn’t talk about Telecel’s total number of subscribers and how it compares to Econet’s. Do you think Econet & NetOne are net-losing subscribers too?

      1. Please do refer to reports issued by POTRAZ otherwise for reporting purposes they use the same basis.

        1. As far as I know, POTRAZ just publish whatever figures they are fed by the MNOs. Last i checked POTRAZ was now implementing some systems to ensure they were getting their own accurate data but not sure that’s been implemented yet. Likely not.

          1. What are the reported statistics according to POTRAZ and how do they compare with the ones given here? The comparison would help.

      2. I personally don’t think Econet is losing subscribers. In actual effect, those Econet subscribers who have been holding Telecel lines to benefit from promotions are dropping the use of them. The MNO have all reached saturation and you will notice that no much growth is going to be recorded going forward compared to the previous years. Even as the case with Telecel, I don’t think the migration of the 130k subcribers will have significant effect on the company financial numbers as it is likely that these were for the people who have a first choice network so it wasn’t recharged regulary.

      3. I did a second round check today. I have 17 lines in my name! I only use one econet line… the line with my ecocash. the dormant lines that i used when i travelled in and out of zim etc. are not in use. Telecel seems to report active vs other networks that report “lines”

  2. If Telecel wishes to survive they need to embrace the evolving business model forced on MNO’s by the emergence of messengers & voip calling which have cut their revenues from sms and voice drastically.

    they need to be forward thinking by embracing the new business model for MNO which will include being a defacto ISP (data), content (tv, multimedia streaming) and financial services (mobile money).

    This is the immediate future for MNO’s so they need to do something on improving network quality and also investing in buying an infrastructure company like econet did with Liquid & ZOL. They need to build data centers and maybe create a technology fund to invest in mobile technology startups that can potential be future revenue streams

    1. …they need to do something on improving network quality and also investing in buying an infrastructure company…

      I think this is at the centre of their woes. The political games between the shareholders and between them and the country’s indigenisation etc… That seems to be the major issue affecting them seriously in terms of new money coming in for capex

  3. An observation about Telecel from my own personal experience. On my Telecel line, I ALWAYS get sms spam for their competitions. Those ones that ask you to sms 25 cents and win 10,000 or whatever. And the occasional recharge bonus message, and cheaper international calls. But I have never received an sms about the free Telecash transfer or Telecash Mukuru integration, and I have only ever received ONE MESSAGE about the Telecel whatsapp bundles and facebook zero. When Econet makes a great product, they make sure EVERYBODY KNOWS. It seems like the ethos at Telecel is that marketing money should only be allocated to those services that bring an immediate pay out – like the 25 cent sms to enter the competition, or those telling you to recharge so that you get bonus. Its a very short sighted and self serving view. I know they are a business but COME ON! Their marketing doesn’t seem to focus on their BEST PRODUCTS which truly add value to the subscriber and make him/her want to stay. I don’t get it. Even the press ads are always about the airtime bonuses chete, obviously with the hopes that people are gonna rush to go buy juice cards. But for other stuff, maybe they think that since its something Econet was already doing, but they are now doing it cheaper, Telecel subscribers will rush to it automatically because it was already publicized by Econet and all Telecel had to do was match it. It simply doesn’t work like that Telecel: ECONET CANNOT DO YOUR JOB FOR YOU LIKE THEY DID WITH MOBILE MONEY!
    Telecel are bleeding subscribers because their marketing is weak and focuses on the short -term NGAZVIBUDITSE MARI IZVOZVI-SO type of approach. Their BEST STUFF hardly gets any limelight because it doesn’t realize quick cash, but that’s the stuff that will keep subscribers.

    1. They have won numerous Marketing Awards. They must be doing something those who award these accolades love.

      1. SO WHAT! Tell me, when marketing people are hired, is their job to get awards or GET RESULTS????? Coz the results are speaking for themselves. Of course Telecel marketing and ads and corporate identity is smarter and better. Econet’s graphics and logos for example are an utter mess. Their corporate ID has always been a disgrace for a company of their calibre. But marketing is also about knowing those thing that add value to the customer and highlighting those. Telecel have not done that – even though their beautiful logos and smart punch-lines get awards. Its still not getting results, and ultimately that’s all that matters when its time to report the results. So it may be well done, award winning stuff, but 130 000 people will bear witness that its NOT WORKING!

        1. I have to agree with ADM here, spot on. Econet recently advised that they would focus more on adding value rather than engaging in corrosive price wars. In my view, that was a very gutsy move. Price is a big needle mover in this market right now because of the tight conditions and everyone seeks “the best deal”. But in the rush to get “the cheapest” or to give customers “the cheapest”, it seems most service providers lose sight of delivering VALUE. But as with most things in life, one soon realizes that the cheapest things do not always translate to the best things. As a result, flight to quality follows.

          Telecel have worked hard to deliver some value through lower pricing or decent bundles. I am an Econet subscriber but I do use the Telecel voice bundles because at least I can use them ACROSS ALL NETWORKS. But that is it. I have tried their international bundles as well but to be truthful, I find better value in loading my Econet line with credit and calling straight.

          Ultimately, the reason I put up with Econet is that they are innovative and are not afraid to lead or fail. They are far from perfect, but show me which company is. Customer service is the bane of their existence and if they can get that right, massive goodwill will follow. But at the end of the day, they are the market leaders simply because they are innovators and will continue to be so well into the future, its in their DNA.
          As to whether they are losing customers too, if 130,000 customers are fleeing from Telecel, where are they fleeing to? Net One and buying magetsi through the wallet? Tel One who are “not in the business of communication”?

          Ultimately ADM is very correct in observing that (effective) marketing is about DELIVERING RESULTS and not winning awards for snazzy advertising. And Econet’s marketing machine is delivering results.

  4. I have an econet line but i hate econet. The problem is that its not easy to just switch networks. Ask anyone who bought a line whcih stats with 0772 if he wants to switch networks or better still someone who bought a line in 2006 for $120 if he want to change. Its like we are stuck in an unhapppy marriage with an abusive husband but divorce is never an easy thing. It always comes with problems of its own. I love you Telecel really I do maybe one day we will be together but for now eish . . its complicated.

    1. LOL, those are my sentiments exactly. I really do love Telecel. But I. Just. Can’t. Leave. Econet

      & yes I have an 0772 line…

  5. I personally don’t think Econet is losing subscribers. In actual effect, those Econet subscribers who have been holding Telecel lines to benefit from promotions are dropping the use of them. The MNO have all reached saturation and you will notice that no much growth is going to be recorded going forward compared to the previous years. Even as the case with Telecel, I don’t think the migration of the 130k subcribers will have significant effect on the company financial numbers as it is likely that these were for the people who have a first choice network so it wasn’t recharged regulary. The concern on all network is to increase the Average Revenue Per User which has been taking a slump over the past months. Going forward, all MNO will find it difficult to increase the MNO and I am of the opinion that gradually, overtime everything is going to be DATA PACKAGE and voice is going to be packaged into that data package

    1. How about converged bundles e.g. 200MB 100 free mins cross network 800 SMS cross network all valid for 30 days and at a cost of $5 prepaid would you go for it?

  6. My Telecel line, is one of the casualties. I swop between the two networks ( the other is apparently inspired in some way)depending on what promotion is running. When they launched the cheap cross network calls I came running back like a prodigal son. I went to get reconnected at their shop in 2nd Street and paid 50 whole cents. After some clicking and typing I was given a new sim card since the one I had was not getting onto the network. The new one didn’t work either. A couple of calls to head office later I was informed that my number had been removed from the network permanently…….. never to return. It had not been used for too long. Nothing could bring it back. Being deal the hunter I am bought another line for an additional 50c. How many lines have disappeared to save some server space?

  7. I use Econet, but i know how abusive it is. It is a bully as well. As of telecel, i have had about 4 lines thereof they got lost and i was weary to replace them coz their network sucks……….

  8. stop complaining you guys come here to the USA and we will give you somethin to complain about. my calls are free and sms free here within the US and data can be unkimted depending on your package……. BUT BUT for an unlimted package be prepae to fork out $80 a month. and we have forced two year contracts that if you want to terminate you will be chareg termination fees on e.g if you terminate one year before the contract ends your termination fee is paying for the remaineder of the year in full up front..

    pafungei hama

  9. haaaaa widzo u rappin jack baba….$80 bcks fr unlimited internet…i dnt mynd th callin..buh jus gimme th uncapped internet and u will c……i wl fork out wfout hesitation…whats $80 nck n zim …..

  10. ECONET, i hv all networks bt love ECONET more than any other network in Zim. I think econet is the best in broadband service. Um a student and love social networking and browsing the web.
    I use econet to browse ovr 50 educational sites for free with econet zero plus free twitter, isnt dat great. My econet is always upto date in subscription.
    TELECEL, Currently i love telecel for zero facebook only. There ar other service such as Telecash and free calls etc, dat i dnt think i will ever use. I last subscribed my telecel like about 2 months ago
    NETONE, I only love netone for its $1=17MB of data. Dats the only thing keeping me on netone. Last subcribed netone obout 2 wks ago. I dnt like its mahala calls bcoz i hv about 2% netone contacts in my phone book. Calling d same pple all ovr again jus sucks.
    In conclusion i think ECONET is the best with many services followed by telecel for cheapr rates lastly net one for cheap data bandles, mahala calls NO!

  11. As a marketer the comments that are given by Mr Mandimika are not said by professionals. My first question is, Why cant those subscribers leave Econet and go for Telecel. “Our analysis indicates that a lot of customers have been rationalising their multiple SIM holding and choosing to have a specific line instead of holding too many from other networks as it is now difficult to recharge and maintain all of them due to low disposable incomes,” Mandimika told us. Whenever the organisation is decreasing in number of sales promotions are not always the solutions. lets go back to the basics of marketing management, when customers are rationalising the number of subscribers they choose brands that they are attached to emotionally which is one reason why Don bought the sim at $120 and does not want to loose it and thereby increasing his customer life time value as an econet subscriber. the marketing team is not effective when it comes to making noise. Marketing is not about promotions, but it is about satisfying the needs and wants of the consumers profitably. I have noticed that the number of voice revenues in all the MNOs is decreasing and only one organisation Econet has noticed this and has drawn a plan to increase data consumption through selling of Smart phones and introducing campaigns that entice the consumers to want to go on the internet more. Marketing team at Econet I salute you guys and Telecel read the concept of product re-engineering to learn new concepts of marketing.

    1. I like your comment, you seem like you know what you are talking about, can I have your contact details.

  12. Telecel improve your data speeds and prepaid International roaming countries.. Your data speeds still suck, just like that of Econet. Why haven’t you got your own Web email Server? Econet has all of this, no wonder why you losing Customers, you not advancing.. A lot times when dailing *144# one gets an overload message??

  13. well personally i have a soft spot for telecel but as of late their service though cheap is not dependable. let them be ‘expensive’ like econet and be always there when i want them but no, so for now till they improve especially data then tiri kwaDr Strive uko

    1. Do you guys know what an all IP network is? research it!!! then prices can come down an improved QOS! but providers here are either to lazy or getting heavy profits, or don’t have the money to upgrade their infustructure more likey they’d rather milk all their subscribers!!

  14. Telecel sucks simple.been their customer for five years they still haven’t improved.The network is always slow.I can’t download anything using a telecel line

  15. how do I stop my telecel line from automatic renewal of the daily WhatsApp bundles every time I juice up airtime, it’s taking my credit without my approval and it’s very upsetting, bcoz. there isn’t an option to stop it from doing this each I juice up…. I need help pliz….!!!!

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