The Sunday Mail
Enacy Mapakame – Business Reporter
Innovations to social media platforms and applications such as the new WhatsApp free voice calling feature are giving migraines to the country’s three mobile telecommunication companies – Econet Wireless Zimbabwe, Telecel Zimbabwe and NetOne.
There is a real possibility that the free voice calls will cut the firms’ already declining revenues.
In early April, Facebook-owned WhatsApp added a voice call feature to its messaging application, allowing Android device users to call for free – well, almost free, as long as a subscriber is connected to the Internet.
WhatsApp’s new voice service is good news for consumers, but is a sour pill for cellular operators already battling to contain falling short message service (SMS) revenues. Technology expert Mr Soul Kabweza told The Sunday Mail Business that the decline in voice-related income was inevitable.
“The threat has been coming,” Mr Kabweza said on Wednesday by telephone. “Most (mobile operators) are already restructuring their business models not to rely on direct voice services. Mobile money services and other value added services are key.”
Last year, the combined total of mobile operators’ revenue fell 18 percent to US$907,4 million from US$1,1 billion a year earlier on lower voice traffic, according to figures from industry regulator, the Postal Regulatory Authority of Zimbabwe.
Consumers spent 2,5 million less hours talking on mobile phones in 2014, or 2,1 percent below the 120,2 million hours they talked the year before, Potraz said.
There are 5,2 million broadband users in Zimbabwe, and 4,42 million or 85 percent are believed to be using free instant messaging applications, particularly WhatsApp, industry statistics show.
This may mean that with the new WhatsApp voice-calling feature, millions of people may already be calling for free, ducking the USc15 per minute voice call charges levied by mobile companies. Mr Kabweza warned that the situation was likely to worsen as subscribers can now make calls via an internet service provider.
ICT, Postal and Courier Services Minister Supa Mandiwanzira said the decline in revenues for voice and SMS revenue was not unique to Zimbabwe and were a global trend which required innovation for alternative revenue channels to tackle.
“The best way is to be proactive and not wait for WhatsApp or Viber to develop something they will counter. They can create alternatives and exploit other areas with growth potential such as mobile money,” said Minister Mandiwanzira. Experts fear mobile operators may attempt to throttle services such as WhatsApp voice-calling by scrambling networks. These are fears that Econet has been quick to allay.
“Econet does not see such new technology, as WhatsApp calling and others, as a threat,” said Mr Ranga Mberi, Econet’s spokesperson, by email.
“We, in fact, see it as an opportunity to offer new possibilities for our customers. As we have stated before, this trend from traditional income streams such as voice is something that Econet had long-anticipated.
“This is why we then took a strategic decision to invest in data services and many other innovative overlay services. It is a strategy that is already bearing fruit for the company and for our customers.”
Telecel, which suffered a 4 percent drop in revenues to US$29,4 million last year, and NetOne, whose revenues climbed 6 percent to US$32,1 million, had not commented by the time of writing.
However, with declining SMS and voice revenues, questions are beginning to emerge.
Is this the time that Government should begin to consider stepping in with policies that protect local mobile network operators from seamless wealthy global competitors like WhatsApp or Viber?
“If there is anyone who needs protection it is the consumers, not the service providers, their charges are still high,” Minister Mandiwanzira said.
Mr Kabweza concurred: “Such moves (protecting mobile phone operators) are only possible when there is vibrant innovation in the technology sector to provide cheaper and convenient alternatives. Also, applications like Facebook and WhatsApp do not depend on regulation in order to operate and are, therefore, harder to control.”
Since 2009 when mobile Internet usage really took off in Zimbabwe, the trend for mobile companies’ revenue has generally gravitated towards weaker voice and text earnings.
Last year Econet introduced WhatsApp bundles, as a counter measure, allowing users exclusive access to the application for a specified period of time. The WhatsApp special bundles sold for USc30 are only valid for 24 hours, while those fetching USc95 and US$3 last for one week and one month, respectively.
There has also been a flurry of promotions among the mobile companies to promote SMS text use.
For instance, Econet’s “Bundle of Joy” promotion gives consumers 100 SMS texts for US$2 airtime.
NetOne subscribers get five free SMS texts for every US$1 airtime purchase.
Telecel has introduced its own WhatsApp and Facebook bundles that range in cost from USc29 to US$2,85 depending on the preferred subscription period.
