Zimbabweans spend US$500m on airtime

Zimbabweans spend US$500m on airtime

Zimbabweans spend over US$500 million on prepaid cellular phone air time yearly, representing over 85 percent of all ICT services expenditure.

Cumulatively, over US$1,1 billion goes to airtime and other ICT products and services.

According to the Zimbabwe Statistics Agency’s latest ICT Household Survey Report (June 2013-June 2014), Harare tops the list, spending US$200 million; followed by Bulawayo at US$52,4 million.

US$2 million, the report says, went to contract line usage and US$658 million to services like the Internet (US$42,3 million), fixed telephony (US$13 million) and ICT equipment repair (US$12,9 million), among others.

A further US$231,5 million was used to buy ICTs and related equipment.

South Africa spends about US$600 million on airtime annually, while Zambia, with 11 million cellphone users, spends about US$430 million.

The Postal and Telecommunications Regulatory Authority of Zimbabwe commissioned the survey to establish the digital divide and then formulate appropriate ICT policies and strategies.

The digital divide is the gap in opportunity between individuals, households, businesses and geographical areas at different socio-economic levels in accessing ICTs and the Internet.

Though the survey only covered 12 months, it can be used to deduce Zimbabweans’ general spending patterns on ICTs.

There are about 12,4 million cellphone lines in use, according to Potraz.

Part of the report reads, “Harare province had the highest share of household expenditure on ICT equipment for the last 12 months ending 30 June 2014 of 35 percent, followed  by Manicaland province with 10 percent. The least share of about three percent was for Matabeleland South.

“Harare province had the highest share of household expenditure on ICT service for the last 12 months ending 30 June 2014 of about 36 percent followed by Bulawayo province with about 10 percent. The least share of about three percent was for Matabeleland North.”

It continues, “ICTs today underpin everything that is done: management and control of emergency services, water supplies, power networks and food distribution chains.

“ICTs support, amongst many others, social and economic activities such as health, education, government and financial markets services, transportation and environmental management systems. They allow people to communicate with colleagues, friends, family members at anytime and almost everywhere.”

This was the second ICT survey Potraz conducted, the first coming in 2010 and covering rural agricultural households only.

The 2014 survey covered Zimbabwe’s 10 provinces and all land use sectors.

In 2014, Potraz slashed voice call tariffs from USc23 to USc15 per minute under a new pricing model, the Long-Run Incremental Cost.

Tariffs were reduced to USc12 in early 2016 and will be USc9 in 2017.

Zimbabwe’s three cellular network operators – Econet, NetOne and Telecel – have been agitating for higher tariffs because of declining revenue.

All three operators participated in the study only for Econet to reject the findings when Potraz came up with the LRIC pricing model.

Econet challenged the determination in court but lost.

Zimbabwe’s mobile penetration rate increased by 1,3 percent to 92,8 percent in the third quarter of 2015, reflecting a continued rise in cellphone use.

The latest survey was conducted in line with guidelines of the International Telecommunication Union, the United Nations’ special agency on ICTs.

The ITU’s mandate involves allocating global radio spectrum and satellite orbits, developing technical standards that guarantee seamlessly interconnected networks and technologies that strive to improve ICT access remote communities.

Econet remains Zimbabwe’s biggest mobile telecommunications company, enjoying 53,9 percent of the market share.

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  • Eunice

    ICT means what nhai reporter? We know that the first time you use an acronomy, you must write it in full then later on use the abbreviation. However this reporter took it for granted and assumed everyone is versed with technological jargon, thats the reason why most pple when they buy newspapers they dont bother to visit bussiness sction coz you make their life hard to understand otherwise simple things. For me i know ICT stands for Information, Communication and Technology but what about the one who is not versed with these terms??? Just an opinion!!!!!!

  • George

    I am sure this is going to cripple many mobile companies. Spending $500m on airtime doesn’t translate to profit. It’s expensive to do business in Zimbabwe. You can’t match Zim prices with regional countries because costs are markedly different. There are power cuts in Zimbabwe and often business is run on generators. Zimra is also charging huge taxes in Zimbabwe. It’s also expensive to pay for licences in Zimbabwe. A year ago we were told only econet was legally registered to operate in Zimbabwe. Others were struggling and failing to operate. One was actually on its knees and recently taken over by government. If government wants to promote viable business and investment in the country they should not control prices of anything including mobile cellular companies. The masses need companies to thrive more than they need price cuts. Econet is one of the cash cows for the economy and recently we saw in the media that massive job cuts are looming. Please stop price controls. The charges may be higher than regional prices but they may be necessary to maintain viability. That’s why econet has survived while others have struggled up to this day. It’s better to continue paying what we are paying now than to lose viable companies to bad policies. It’s better for the government controlled netone to charge low prices and force others to come up with reasonable prices than to prescribe prices that may kill the business

  • heeeeei

    So there you have it. Zimbabweans spend 500MUSD on cellphone airtime annually compared to the much bigger market of RSA at 600MUSD annually? The more the users, the less the costs?