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    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»Acquisitions»Telecel Zimbabwe Loses 13% Subscribers In Q2, Econet & Netone Share Spoils
    Telecel Zimbabwe

    Telecel Zimbabwe Loses 13% Subscribers In Q2, Econet & Netone Share Spoils

    0
    By Tapiwa Matthew Mutisi on October 8, 2018 Acquisitions, Africa, Brands, Business, Infrastructure, Innovation, Investments, News, Products, Report, Review, Technology, Telecoms

    Zimbabwe’s beleaguered and now the smallest mobile network operator Telecel Zimbabwe woes continue haunting the network provider that according to POTRAZ’s recent second quarter report Telecel lost 13% subscribers, and guess who partook of the spoils? Econet and NetOne.

    On many fronts, Telecel is losing its battles against its competitors. Although the economic environment has been hostile to do businesses properly in general, many companies have adapted.

    In the case of Telecel, its woes seem to stem from not only the prevailing economic conditions but largely to its own inherent failure and inertia to improve its services to capture new customers.

    Active mobile subscriptions declines

    Mobile phone and internet penetration have steadily grown in Zimbabwe, but Telecel has failed to partake in the trend. Take look at the preceding second quarter, Telecel is the only MNO that didn’t witness an increase in its subscriber base.

    As it happens, it lost a whopping 13% of its subscribers in the second quarter alone. And of course, the spoils were shared between Econet and Netone with each registering a 4.5% and 10.1% increase in active mobile subscribers respectively.

    From another angle, Telecel lost 2.1% of market share in the second quarter whilst Econet and NetOne gained market share by 0.6% and 1.4% respectively.

    The lost 13% subscribers now give this state-owned MNO, Telecel a meager 10% of the market share. Mind you, in the first quarter of 2018 it was serving 13% of the market.

    Oops!, I had forgotten Telecel is a state-owned enterprise. The MNO was taken over 2016 November in a deal that Supa Mandiwanzira vehemently pushed to go through.

    By taking a look at the fourth 2016 industry report, the quarter in which it was acquired by the government, Telecel had 1,805,612 active mobile subscribers which translated into 14% of the total market at that time. Now the state-owned MNO has 1,253,381 customers.

    One wonders whether it was boon or a bane for the government to have a controlling stake in Telecel. I have every right to say that the acquisition was a bane considering government hasn’t really invested much into Telecel, judging by mobile base stations.

    In November 2016, the month of the government’s acquisition, Telecel had 1081 mobile base stations, now it has 1085 so it just added 4 base stations between November 2016 and 30 June 2018. Over that time ( November 2016 up to 30 June 2018) Econet has added 613 mobile base stations and Netone added mobile base stations.

    So besides, the red-tape associated with state-owned enterprises what is the government really bringing into Telecel? To stand toe to toe with other MNO’s Telecel needs a wider coverage to cater for the growing demand of mobile services in Zimbabwe.

    Okay, If Telecel is not expanding its coverage with increasing its mobile base stations, how will it capture new users? Should the government choose to be serious with Telecel, it would have to heavily invest in the latest LTE mobile base stations which are proving to be integral to Econet’s success in this era where as data usage continues to be on an upward trend.

    Telecel has often lagged, often playing ‘third fiddle’ to its bigger competitors in introducing enticing innovative product so I hardly think it can come coming up with new products which would sway users to its side. Innovation doesn’t seem to be Telecel’s blood.

    Ripple effects

    Network effects tell us that an increased number of users improve the value of a good or service. There is a correlation between a network’s subscriber base and customer base of its mobile money platform. Telecel is losing its customers, so it stands to reason that in the mobile money sphere it’s losing out too.

    Although it didn’t lose its mobile money customer base (rather it increased) other MNO’s registered incomparable increase in their mobile money customer base. Telecel’s mobile money customer base grew by 0.1% compared to Econets 11.5% and Netone’s 93%.

    Looking at the number of mobile money agents, it even paints a sadder picture for Telecel because its number of agents declined by as much as 14.7% whilst other MNO’s enjoyed significant upsurge of their agent outlets.

    As consumers, we want to see Telecel performing well because it will pressure other MNO’s to improve their services and the prices to our benefit. We hope the newly appointed Minister of ICT will bring some reforms at Telecel that will set it on a path to become competitive.

    Related

    Acquisition brands Business Customers Econet Government Investment MNOs NetOne POTRAZ Technology Telecel Zimbabwe telecoms Zimbabwe
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    Tapiwa Matthew Mutisi
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    Tapiwa Matthew Mutisi has been covering blockchain technology, intelligent technologies, cryptocurrency, cybersecurity, telecommunications technology, sustainability, autonomous vehicles, and other topics for Innovation Village since 2017. In the years since, he has published over 4,000 articles — a mix of breaking news, reviews, helpful how-tos, industry analysis, and more. | Open DM on Twitter @TapiwaMutisi

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