As we looked at Econet’s latest annual report we noted that there had been no change in the downward trend of their voice revenue. For years voice revenue has been falling industry-wide as cheaper online alternatives like WhatsApp have grown in popularity.
For all the MNOs voice revenue was the cash cow for years and when those revenues started declining plans had to be made. As we saw in Econet’s annual report, data and EcoCash revenues have been increasing to offset the declining voice revenue, though not fast enough as total revenues still fell.
In South Africa, the situation is similar for the MNOs, voice revenue has been falling for years. Vodacom has however crossed over to the other side. For the first time in the company’s history data revenue has surpassed voice revenue.
Their data revenue grew by 15% and now represents 42.6% of the company’s revenue. The 15% growth in data revenue was enough to offset the 4.6% decline in voice revenue.
The challenge for Vodacom and indeed all the other MNOs in both South Africa and Zimbabwe has been to increase their customers’ data usage. Vodacom achieved this as average monthly data usage for the past six months increased by 19.5%. There is still room for growth there as data customers now account for 50% of their customer base.
The POTRAZ Q2 report showed that mobile internet data usage from Q1 to Q2 increased by 15.8%. All the mobile operators registered an increase in data usage, some more than users.
The challenge however is that WhatsApp is the internet in Zimbabwe with the social media platform accounting for 44.2% of all internet traffic in the country. With all the MNOs offering WhatsApp bundles this limits the data usage.
If there were no bundles the average monthly data usage would increase, users would get to experiment with the rest of the internet. Also if you have experienced the disappearing act data does when you enable out of bundle browsing then you know that were it not for bundles you would need to constantly buy airtime.
Even with those challenges data usage still increased but the increase could not counter the rate at which voice revenues declined. The MNOs are going to have to be creative to get people to use more data as it is a lost battle trying to increase voice traffic regardless of the small increase in voice traffic from Q1 to Q2.
Vodacom SA shows that it is possible to rely on data revenue and the Zimbabwean MNOs can take heart from that. However the Vodacom group has diversified further and counts M-Pesa as theirs and gains there help offset declining voice revenues.
In that regard Econet has the upper hand in Zimbabwe with EcoCash dominating the local market share and contributing more to group revenues in the process. NetOne and Telecel’s mobile money solutions are not nearly contributing enough to their groups. Econet further has Kwese in its infancy in Zimbabwe but should contribute to group revenues.
Seeing as NetOne has never posted a profit in its entire history I doubt the fellows in charge are losing sleep over this.
Going forward we will see how the MNOs deal with the ever decreasing voice revenues but only Econet seems to be in a position to weather the storm.