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Econet Wireless experiences a 25% decline in airtime sales as subscriber spending patterns shift

Local mobile operator Econet Wireless recorded a sharp decline in airtime sales in the previous financial year as subscribers reduced their expenditure on the most visible commodity sold by telecoms services.

According to the mobile operator’s integrated annual financial report for the year ending February 2016, revenue from local airtime sales dropped from $362.375 million in the 2014-2015 financial year to $268.359 million in the latest review period. This is a 25.94% decline in sales.

This trend ties in with the operator’s overall revenue figures which dropped from $746.2 million to $641 million during the same period and the decline in its Average Revenue Per User (ARPU) numbers.

While Econet has identified factors like regulatory interference as some of the leading causes for the weaker results in the past year, the issue of depressed airtime sales points to other factors, especially since Econet has maintained the highest subscriber numbers.

Over the past few years, the telecoms industry has experienced changes in usage patterns that have emanated from the proliferation of over the top services like WhatsApp which provide subscribers with communication alternatives that reduce the need to spend as much on airtime for communication.

The biggest contributor to Econet’s revenue has always been revenue from voice revenue and any change that reduces consumption related to that will have a significant impact.

Another factor affecting sales is the state of the national economy which has had an impact on overall spending habits related to consumer services. Airtime, like everything else that requires consumers to fork out a precious dollar has been hit by Zimbabweans’ decreased disposable incomes.

Over 35,000 affected

These latest numbers on airtime sales also quantify the downstream effect that shifting patterns in economics and technology have on entire value chains.

According to Econet it has over 35,000 vendors selling airtime. With a major reduction in airtime spending, these are the first people to experience the change in usage patterns.

Their situation doesn’t seem like it will improve anytime soon either. With alternatives like WhatsApp becoming increasingly popular and subscribers opting to adopt these cheaper communication tools in a tough environment, there will likely be a continued decline in airtime sales.

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