Potraz reports continue to indicate a decline in voice calls while mobile internet data usage increases. The 2017’s 1st Quarter report reveals a 7.1% drop in voice calls from the previous Quarter (2016) while a 4.7% increase of mobile internet data usage from the last Quarter was noted.
In February, we wrote on how the Minister of ICT, Supa Mandiwanzira had attributed the decline of mobile voice traffic in Zimbabwe to Over-The-Top (OTT) services. He also alleged that Zimbabwe had incurred a ‘loss’ of US$26 million due to that phenomenon.
Okay, now that we have identified the ‘problem’, isn’t it time to figure out solutions?
By solutions I’m by no means suggesting crazy mobile data floor pricing, because clearly, that’s counterproductive. Instead, what service providers (or any other business really) should accept is times are changing and probably faster than before, therefore flexibility is the way to go. You can’t expect the same business model you prepared 10years ago to apply and be successful today – the same way the business model you draft today may not be applicable in the next 10 years. Change is indeed inevitable!
So instead of crying foul on how change is disrupting your traditional ways of doing things, adjust. I commend what TelOne did or is doing. TelOne noticed that the use of voice calls on landlines was slowly fading away and accepted it (first step – well maybe second after identification). Now they are focusing more of their energy on providing internet access instead since internet is the ‘new’ in-thing and it won’t be going away for a very long time – I think.
Well, even though TelOne isn’t perfect in that service yet because it’s still setting up it’s structures and all, I say it’s in the right place and I have numbers to prove it. The Potraz report reveals that revenues by Internet Access providers rose by 11.4% in the 1st Quarter of 2017. The revenues rose from the US$40.9 million that was recorded in the last Quarter of 2016 to US$45.6 million.
So what now for MNOs?
I’ll assume that the greatest revenue for our local MNOs comes from voice calls. I say that because the decline in voice calls also came with a decline in revenues for them. According to the Potraz report, revenues by mobile operators declined by 9.7% from US$199.2 million (last Quarter 2016) to the US$179.8 million attained in the 1st Quarter of this year.
The choice of lowering voice call tariffs and getting a lot more people to call might be a little off, but not entirely because there’s still a significant number of people who do not use smartphones. Also, some areas have bad internet reception and mind you I am not just talking about rural areas. I know quite a number of urban places whose network doesn’t support WhatsApp, Facebook or other similar platforms calling. It’s either the call is irritatingly slow or it doesn’t connect at all.
The other reason would be as simple as people wanting to record their calls. I don’t know if other devices can support that functionality on Whatsapp calling but mine doesn’t and I’m sure it’s not the only one. In fact, after using NetOne’s OneFusion ‘free’ calls, I’ve realised how much I prefer using the regular voice calls when making local calls (haven’t tried their international calls though) too WhatsApp calling. That then got me thinking; do people actually prefer WhatsApp calls etc. for any other reason besides the fact that it’s cheap?
Alternatively, MNOs could start investing more on their mobile internet access services. For areas like the ones I mentioned above, people might not be buying their data simply because it expires before they even use half of it due to the slow and unstable connections. If, for example they introduce 3G or LTE in these areas, surfing the internet would be much more convenient and maybe people will start buying more data thus increasing their revenues. They could also do the same even for rural areas.
Another option is to start selling smartphones be it originals, imitations or second hand – it really doesn’t matter. They could sell these at a cheaper price and this will in the long run cause more people to have smartphones and hence generate more demand for their internet. I personally would trust buying a phone or any other gadget from such shops than from anywhere else.
Lastly (on my list so far), they could reduce the price of their data, yes reduce. This can increase the uptake of subscribers as it has for NetOne. NetOne’s subscribers have increased by 1.9% since the last Quarter – that’s greater than Econet, whose increase has only been at 0.5% while Telecel has actually had a decline of 1.1% in its number of active subscribers since the previous Quarter.
Not only has NetOne gained subscribers, but its revenue has also increased due to the OneFusion promotion. Although overally, they are currently experiencing losses due to other factors at play but I surely believe that if they keep at it, that will change over time. This actually goes to show that cheap does not always mean losses because despite their very cheap data, they have a high turnover due to the increase in customers.
Of course I didn’t do business studies but I still hope this will help stir our MNOs in the right direction, for their sake – well, that’s not entirely true because I also stand to benefit if they do.