Telecoms second quarter operating costs jump 44,9pc Dr Machengete

Michael Tome  Business Reporter

THE Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) says telecommunication companies; operating costs for the second quarter to June 2022 grew by 44, 9 percent to $24, 7 billion driven by impact of sustained power outages.

According to POTRAZ, the cost of alternative energy to deal with incessant power outages in the period coupled with a challenging economic environment militated against the sector’s performance.

To compensate for the random and prolonged power outages telecommunication firms had to rely on alternative sources of energy, mainly diesel, which is more expensive than electricity, thus pushing up the expenditures.

The rising cost of operations prompted the regulator to allow for tariff increases for fixed and mobile network operators earlier in the year.

POTRAZ director-general, Dr Gift Machengete in a statement accompanying the telecoms sector second quarter performance, highlighted that the current economic climate was characterised by depressed consumption and foreign currency constraints,which have manifested through reduced traffic volumes.

He said the shortage of foreign currency and lack of affordable working capital from local financiers was choking the sustainability of its operations.

“Prolonged load-shedding remains a challenge to operational efficiency, impacting the overall quality of service and raising the cost-of-service provision, the industry is therefore investing heavily in alternative power sources.

“The sector continues to be negatively affected by the inflationary operating environment, unavailability of credit, shortage of foreign currency amongst other challenges,” said Dr Machengete.

Raphael Mushanawani, NetOne chief executive officer, indicated at the firm’s annual general meeting that they were looking to fully implement green energy sources by introducing solar-powered base stations around the country .

He said NetOne already had installations that powered 25 percent of its sites with solar and hybrid solutions.

Meanwhile, the telecoms industry report shows that the mobile operators’ revenue grew by 35,1 percent to $38,9 billion in the period under review.

Revenue generated by the fixed telephone network operators grew 38, 2 percent to close the period at $5, 15 billion, from $3, 72 billion recorded in the first quarter of 2022.

Nevertheless, operating costs increased by an even higher rate at 79, 9 percent to $5, 7 billion during the quarter under review.

In the same period, fixed telephone voice traffic declined by 9 percent to 83, 7 million minutes from 92 million minutes recorded in the prior quarter.

The decline in fixed voice traffic has been attributed to a fall in active corporate lines during the quarter under review as the bulk of fixed voice traffic is generated by corporate lines.

On the flip side, mobile voice traffic amounted to 2, 35 billion minutes, a 32,6 percent growth from 1, 77 billion minutes recorded in the first quarter.

The total number of active mobile subscriptions declined by two percent to 14 006 034 in the second quarter, from 14 289 085 recorded in the first quarter of 2022 thus the mobile penetration rate declined by one percent to reach 92,3 percent.

A total of 25,756 terabytes of mobile internet and data were consumed in the second quarter of 2022, representing a 16,8 percent increase in internet and data traffic from 22,052 terabytes consumed in the first quarter of the year.

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