Over 400 000 subscribers deserted Econet Wireless Zimbabwe between July and September last year, latest Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) statistics have indicated.
Econet was the only one of a three-member league of mobile telecoms providers to report falling numbers in active subscribers during the period, according to the POTRAZ report. It said the slide in Econet’s active subscribers dragged the combined sector total southwards.
Econet controls close to 50 percent market share of the 20 million subscribers on the three mobile phone networks, which include its State controlled rivals, NetOne and Telecel Zimbabwe.
Of the 20 million, only 12,7 million were active during the period when Econet’s active subscribers fell by 6,6 percent to 6 271 562, from 6 714 832 the previous quarter. This represents a 443 270 decline in just three months.
“Active subscriptions as at 30 September 2016 were 12 696 303,” POTRAZ’s report said.
“This represents a 2,4 percent decline from 13 010 873 recorded at the end of the second quarter of 2016. The decline emanated from the decline in Econet`s active …subscriptions by 6,6 percent. The quarterly comparison of market shares shows that Econet lost market share by 2,2 percent as a result of the decline in active subscribers on their network. On the other hand Telecel and NetOne gained 0,5 percent and 1,7 percent respectively,” POTRAZ noted.
Analysts blamed high tariffs at the country’s largest mobile phone operator for the exodus.
“Tariffs are an incentive or disincentive to subscribers,” said Prosper Chitambara, chief economist at the Labour and Economic Research Institute of Zimbabwe.
“The drop could be because of their pricing, especially on data products. I know of a number of subscribers who have left Econet because of high data prices,” he told the Financial Gazette’s Companies & Markets.
“Econet will have to work very hard to regain its subscribers,” said analyst, Kingstone Kanyile.
He said during the quarter under review, a new team of executives led by Brian Mutandiro took over the top chairs at NetOne following the controversial departure of former managing director, Reward Kangai.
“Mutandiro said they would look at where opportunities are and go there. They came up with OneFusion, which offers data, Whatsapp, Facebook and Twitter bundles in one card. They went on a drive to market it and sponsored the Zimbabwe national soccer team. Econet did not move; they kept their tariffs at a premium. None in their right senses can resist this cheap product called One Fusion. And as I said, Econet is in a fix. They will have to work hard to win back their subscribers,” Kanyile added.
Econet also surrendered significant market share to NetOne and Telecel Zimbabwe. Telecel, taken over by government in a US$30 million deal last year, grew its active subscribers by 1,2 percent to 1 805 243, from 6 714 832, according to the report. It said NetOne’s active subscribers increased by 107 139 inside the three months.
The report noted that total subscriptions also declined by 0,1 percent to 20 239 805 subscribers during the period, from 20, 257,180 recorded at the end of the second quarter.
But for Telecel, it was an interesting turn of fortunes.
During the same period in 2015, an exodus of subscribers hit the then privately controlled network in the aftermath of government’s threat to cancel its licence over non-payment of fees for an operating licence.
The country’s third largest mobile phone network by subscribers plunged into crisis after government said it had cancelled its licence, a situation that left 1 000 workers in the lurch.
Government accused Telecel of failing to pay US$137,5 million needed to renew its licence. In between the frustrating moments, government renewed efforts to bring finality to a long standing dispute over the network’s compliance with the country’s empowerment laws, with authorities piling pressure on major shareholder, Telecel International, to sell at least 11 percent of its stake to indigenous Zimbabweans.
Almost 60 percent of Telecel’s subscribers were inactive in the months after a brief cancellation of its operating licence in April 2015, which would be followed by a surprise State takeover of the network by ZarNet under funding from the National Social Security Authority.
But for Econet, which maintained its dominance in the mobile phone market despite the slide in subscribers, its troubles with the market seem to be unending.
Subsequent to year end, the firm engaged in battle with the State after hiking data tariffs.
Last week, NetOne said it had added over 36 000 new subscribers inside four days after Econet increased data tariffs in response to a directive by POTRAZ.
Econet on January 11 unveiled a set of new tariffs for data, which included what are known as data bundles for WhatsApp and Facebook.
The new data tariffs were too high, in some cases they had increased by as much at 500 percent, triggering a furore in the market in which the majority of consumers are living in poverty and experiencing serious decline in disposable incomes due to high unemployment rates in the country.
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| Econet Loses Half A Million Subscribers After Hiking Its Prices |
