Market-share Gain Not Enough for NetOne

Results released by the Postal and Telecommunications Regulatory Authority of ZImbabwe (POTRAZ) during its second Quarter sector performance findings indicate that NetOne was the only mobile operator to register an increase in active subscribers as well as witnessing a positive market share gain of 34.7% from 33.8%  in the first Quarter.

For over a decade, NetOne had been the sector’s dark sheep owing to its miserable and pathetic subscriber figures trailing after Telecel and Econet Wireless. NetOne’s poor performance was largely attributed to poor services and its links to the ruling ZANU-PF government as subscribers feared their personal and private conversations would be intercepted by the secret service.

By Michael Gwarisa

To drive its subscriber levels as well as gain market share, NetOne introduced¬† the “Dollar A Day” voice bundles three years ago , leading to an exponential and rather miraculous surge in its subscriber base up from 2.5 million in 2014 to 4 million within a space of 12 months.

According to NetOne chief fiance officer Sibusisiwe Ndlovu, the company targets to hit the 8 million mark by 2017 meaning after that, it would only need a million subscribers to catch up with Econet wireless whose market share suffered a 0.5% decline in the second quarter to record a 51.6% from 52.1% in the first quarter.

On the revenue side, it is without doubt that the Telecommunications sector suffered a major blow in both the first and second Quarter of 2016  as a result of increased usage of Over the Top services such as Whatsapp, Viber among others. POTRAZ hinted that total voice revenue during the second quarter declined by 11.8% to record $228, 748,120 from $237, 771, 722 across all Telecomms.

Despite NetOne gaining tremendous ground on the subscriber side, it still needs to work on innovation so as to develop new products that would see significant revenues trickling into the company. NetOne recorded a $45,5 million revenue growth in the first quarter of 2016 from $ 44,3 million registered in the same period in 2015. The bulk of its revenue was driven by voice calls and whatsapp unlimited bundles which have seen a number of subscribers migrating from other service providers.

Econet vs NetOne

NetOne’s over reliance on Voice and data revenues could spell doom for the mobile operator in the long run considering the massive shift in dynamics and business survival strategies obtaining in the telecommunications sector.

According to Econet’s Chief Executive Officer Douglas Mboweni, Econet Services contribute not less than 11% to Econet’s revenues through services like Ecocash, Ecofamer, Ecosure, Ecohealth and Connected services. EcoCash has not less than 5 million subscriber while Ecosure has 1.3 million and EcoHealth has 682 000 customers.

On the contrary, NetOne’s One Wallet only has about 800 000 subscribers. This doesn’t sound right especially for a company whose subscriber base is growing at such a huge rate. By introducing new products apart from voice and data promotions, NetOne could unseat Econet from the helm, a position it has enjoyed for too long.

It is now evident that the new board steering NetOne’s ship has new plans that could turn around the company’s fortunes.

 

 

 

 

 

 

 

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