Bad connection
Communications networks in Zimbabwe are crumbling. A chronic lack of investment has plunged the country’s fixed-line network, operated by state owned TelOne, into serious disrepair.
It’s often difficult for people outside the country to get a connection to Zimbabwe.
The country’s three mobile operators — Econet Wireless (1m customers), state-owned NetOne (400000) and Telecel (250000) — are struggling to keep their networks operational amid a dire shortage of foreign currency.
A former executive at one of the companies, who asked not to be named, says lack of access to foreign currency means operators can’t import spares and equipment to expand capacity to meet pent-up demand. Then there’s the loss of skilled staff, especially engineers and IT experts, to SA and other markets in Africa; highly regulated tariffs which are below cost; and constant power failures.
“The state power authority is also battling to maintain electricity supplies . and expand power generation and supply infrastructure ,” says the former executive. “As a result, operators, in particular Econet, have spent millions on diesel generators to power their base stations, and this usually causes massive congestion as base stations trip and people can’t make calls.”
At less than 15% of the addressable market, mobile penetration is very low. The telecom industry’s fortunes are only likely to improve once the economic meltdown subsides.
There is some hope, though. Government has liberalised exchange controls, allowing operators to charge for services in US dollars. “They hope to generate sufficient reserves to import network equipment and pay foreign contractors to expand their networks.”
The former executive also believes there are opportunities for foreign telecom companies to invest in Zimbabwe. “The most likely route would be for a company like MTN to take over or buy into an existing operator rather than to start a greenfield operation because of the costs involved.”
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