Cash Crisis Has Econet, Netone And Telecel Swimming In (Mobile) Money

In POTRAZ’s recently released Q3 report it was revealed that mobile money is contributing more to Mobile Network Operator (MNO) revenues than ever before. This is compounded by the steady decline voice is contributing to revenues.

All the three mobile operators, Econet, Telecel and Netone recorded growth in the number of active mobile money subscriptions from the second quarter to the third. Combined, there was a 15% increase.

Combined, mobile money contributed 18% to MNO revenues, up from 15.1%, a 4.9% increase. Contrast this with data revenue’s 0.3% increase and the 4.9% decrease in voice revenue’s contribution.

Netone (through OneWallet, which is now OneMoney) recorded the biggest percentage increase whilst in raw figures Econet (EcoCash) added an impressive 443,397. Telecel (telecash) added 23,500 and Netone added an astounding 38,303. That’s a 291.6% increase from Q2 to the third quarter.

That growth for OneMoney is really impressive in that it is not solely down to an increase in mobile subscribers (increased by 23,439) but rather they marketed their product better to their subscribers. We know that many of those enjoying Netone’s One Fusion do have Econet lines for their EcoCash needs. Some of those people were convinced to register for OneMoney.

With the rebranding of OneWallet to OneMoney that was done in the fourth quarter and the extensive marketing campaign they embarked on we expect OneMoney to grow further in the next quarter.

So the growth the mobile operators experienced in mobile money revenues shows that every cloud truly has a silver lining, well at least this particular cloud does. It is because of the cash crisis that there was growth in mobile money. The same cash crisis which hit Africom hard. The same cash crisis which affected their operations also improved their fortunes.

With there being a cash shortage, Zimbabweans were left with no choice but to adopt electronic transactions as the cash just wasn’t available. It is the reason over $11 billion was processed on mobile platforms from January to September this year, 2017. Of that $11 billion processed at least $2 billion was mobile money.

Mobile money is still the only option for most Zimbabweans when it comes to electronic transactions, in opening a mobile money account there are fewer hoops to jump through than with traditional banks. Looking at what it is that people are using the funds in their mobile wallets for it becomes clear that it has become cash for the average Zimbabwean.

From Q2 to Q3 both Cash-In and Cash-Out transactions increased by 36.1% and 27.9% respectively. We take this to mean all transactions moving funds into mobile money accounts and not necessarily hard cash Cash-Ins and Cash-Outs. If it was for hard cold cash only it would have decreased because of the cash crisis.

So more funds were moved into and out of mobile money wallets. What were people spending the money on? Airtime, bill and merchant payments increased by 87.9% to over $486m in the third quarter. With supermarkets, clinics and pharmacies, ZESA and even the police accepting spot fines via mobile money it is no surprise there was such an increase.

The mobile network operators will be hoping that when the cash crisis is finally fixed, people would have gotten used to this cashless lifestyle that these payments will continue to be paid via mobile money.

So over $2 billion processed in nine months and over $486m just for airtime, bills and merchant payments. That’s quite the cake they had to share although EcoCash still takes quite a hefty portion. EcoCash’s marketshare fell by 1.3% from Q2 to Q3 but they still control 96.7% of that market.

Will telecash and especially OneMoney’s push eat further into EcoCash’s marketshare in Q4? Probably but all three should see growth in the next quarter.