Econet Zimbabwe’s broadband growth slows, highlights need for service innovation

   

Earlier today Econet Wireless Zimbabwe unveiled its financial results for the year ended 29 February 2016 and the numbers shared by the telecoms operator gave a reflection not only of the group’s performance but also of the challenges faced by telecoms operators.

Voice and SMS revenue were highlighted for their continued decline and issues like regulatory interjections were brought up as impediments for optimal performance.

At the same time, the one area that has been a huge bet for future growth in telecoms – broadband services – hasn’t stayed on the same growth trajectory that brought it front and centre in Econet’s evolution.

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In the financial year reviewed, broadband services contributed $113 million to the Econet Wireless Zimbabwe Group revenue total. This is a $10 million increase from the $103 million that it brought to the table a year before.

That increase translates to a 9.7% rise in revenues, which is markedly lower than the 43% growth tip that broadband services were on in the previous year.

When compared to other service lines broadband growth is critical right now. Voice and SMS are slowly being written off and broadband is one of the service lines that has been eyed as the future revenue driver. Its slowdown raises some concerns about Econet’s future growth especially as voice revenue continues to recede.

In some ways the slowdown is understandable. The Zimbabwean macroeconomic environment hasn’t been kind to any sort of business enterprise and consumer services like telecoms are at the mercy of shifts in consumer spending patterns.

The result is that broadband services aren’t as enthusiastically snapped up and their use is limited.

Economics aside, though, Econet and all local mobile operators have to figure out ways to open up mobile broadband services to more subscribers and to trigger data use. Innovation around their “next big thing” has to be a priority.

Beyond just investing in the network infrastructure this means figuring out how to introduce more subscribers to data services through affordable entry-level smartphones while encouraging internet use through competitive broadband prices.

So far mobile internet access in Zimbabwe has been dominated by WhatsApp and Facebook because of the social media bundles created by operators as a way of “monetising” these Over The Top (OTT) services that are slowly rendering voice and SMS services redundant.

While the bundles lead mobile operators’ broadband service lineups, they should be accompanied by a gallery of broadband products that are relevant to subscribers.

There’s still a lot of potential in mobile broadband delivery for the Zimbabwean market. With some innovation, there might be a return to stronger growth numbers in the next year.

You can access the Econet Wireless Zimbabwe results by following this link 


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