Mobile Service Quality Dips As Inflation Erodes Networks’ Incomes

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By Alois Vinga

ZIMBABWE’S hyper-inflationary environment has eroded Mobile Network Operators’ (MNOs) incomes resulting in compromised service delivery quality due to limited foreign currency availability.

A Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) report covering the first quarter of 2020 contains figures which show MNOs’ incomes have depreciated significantly.

The current voice tariffs have reduced by 33% from April 2019 when they were at ZW$0.22 cents per minute equivalent to US$0, 0463 compared to the current period when a minute is being charged Z$1.17 equivalent to US$0, 0156.

Mobile internet data bundles value have depreciated by 28 % during the same when prices were pegged at ZW$0,05 equivalent to US$0,0105 per megabyte to the current ZW$0.23 equivalent to US$0,003.

“Given the current inflationary pressures in the economy, operating cost containment will be even more crucial for operators to maintain profitability as the growth of operating costs poses a threat to operator viability,” POTRAZ said.

The observations come at a time when inflation rates have surpassed 700% forcing many players in the industrial sector to sell their goods and services in foreign currency.

However, POTRAZ predicts that data and internet services will continue to drive industry growth. The shift towards telecommuting and e-learning will drive demand for data and accelerate the voice-data substitution.

Social distancing measures introduced to avoid the risk of exposure and spreading of Covid-19 will see increased usage of ICTs as people avoid physical contact and resort to conducting business online.

“The use of Over-the-Top services, such as WhatsApp, Skype, and Viber, is expected to grow in the current economic environment as consumers cut back on communication expenditure,” added POTRAZ.