Connect with us

Techunzipped News

Zimbabwe Has A Monopoly Problem And It’s Huge

Graphs from POTRAZ report

Telecom

Zimbabwe Has A Monopoly Problem And It’s Huge

Digitisation is deeply changing the competitive boundaries of the telecom industry. Zimbabwe is facing telecoms autocratic monopoly control over their customers. If we don’t like our Internet Company or our mobile provider, we either have no place to turn, or the alternative is no better. Changing a number from one network to other network is a problem, mainly because of lack of number portability and fear of losing your business contacts.

The question, though not often asked, is relevant for discussions of common regulation as it pertains to either voice services, landline or Internet access service.

But we have to ask: Is there an underlying problem that can and must be addressed?

Monopoly companies are the primary reason that data prices in the Zimbabwe are higher than most countries in the world.

Speaking at the official launch of OneMoney, minister of ICT Postal and Courier Services, Hon. Supa C. Mandiwanzira expressed concern over monopolistic tendencies in the telecommunications sector.

And last night, he restated that “During the third edition of the Mobile Money and Digital Payment Conference this year, I expressed concern over monopolistic tendencies in the telecommunications sector. It is of grave concern to us as government that a lot of people rely on a single supplier for a critical service such as mobile money service”.

With each change in industry structure and technology, telecom companies have had opportunities for differentiation opportunities exceptional performers took advantage of by creating and capturing value.

“It is our desire to see competition in the digital ecosystem. Through competition, we expect to see more and more innovation that is customer-driven.” said the minister.

Telecom companies today continue to face challenges, including noteworthy intermodal competition and competition from adjacent businesses, for example, from over-the-top (OTT)-based service providers such as Facebook and WhatsApp.

The theory of “natural monopoly,” has been widely questioned, presumed that redundant telephone infrastructure was economically inefficient. Telone has been the only fixed line provider from as long as I can remember. The principle is that natural monopolies have to be created by the regulator, as there is no competition.

Other countries like France or Japan enjoy lower prices because of higher competition, which is encouraged and protected by government regulation. For example, according to the New America Foundation study, in Paris, five different providers offer “triple play” bundle services (Internet, TV, and Phone) at very competitive prices. The cost is around $30-35 per month, for a download speed of up to 100mbits. In New York, the best-ranked bundle offer costs $90 but offers a download speed four times slower. In a ranking of the best “triple play” offers, the first U.S. city (Chattanooga, Tenn.) ranks 30th out of the 57 U.S. and World cities analyzed for the study.

According to the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz)’s latest industry report for the second quarter (Q2) of 2017, Econet Wireless Zimbabwe maintained its leading market position with over 50% customer market share of the mobile industry, and 78% revenue market share ahead of its two main competitors NetOne and Telecel.

Econet continues to outperformed its competition and grow its active subscribers to 50.2% and they processed over 80% of the voice traffic and 75.4% of data usage in Zimbabwe.

 

In terms of bandwidth coming into the country, Liquid Telecom a subsidiary of Econet Wireless accounts for about 81% of internet capacity coming into Zimbabwe. That’s about 80Gbps of the 98Gbps incoming bandwidth. The nearest rival, Telone, has just 15Gbps.

Ignore for the moment, the separate question of whether ownership of cell towers by mobile carriers is necessary, or actually talks a degree of market power that prevents other contestants from entering the market.

Does ownership of base stations provide a strategic advantage or represent a barrier to competitor entry?

Telecoms must constantly fight to keep up with the expectations of customers, and a lack of cohesion across various consumer touchpoints quickly undermine brand reputation and result in losing their customer base.

The same view is also misapplied in the electric power supply, broadcasting, and water treatment, triggering creation of a massive regulatory structure to where the government has sanctioned monopoly power.

For any change to happen, Hon Mandiwanzira has acknowledged the problem, which he learned is no easy feat. More importantly, the average person has to learn why this is his/her problem and why he/she should care. Otherwise, the silent crisis carries on.

Pardon has been a technology enthusiast his entire life and has spent the better part of last decades in information technology and security, and he writes with an aim to remove some of the “mysticism” from the cyber world. He’s the Editor at Techunzipped. Away from the keyboard, you’re likely to find him playing with the latest gadgets or the latest Game.

More in Telecom

Ad
Ad

Facebook




Trending Posts

To Top