Zimbabwe’s three mobile network operators face collapse as revenues dwindle in US dollar terms despite huge foreign currency demands and rising costs in the industry.
Currently, the MNOs are barely breaking even with indications they could sink permanently into the red, Technomag reports.
Despite frequent upward reviews in tariffs, the players are trailing the exchange rate which is officially about 1:16 and 1:20 on the parallel market.
The industry, by its nature, is capital intensive as players are often on their toes to keep abreast with technology. Globally, players are looking beyond LTE, now chasing 5G.
This, insiders at Econet said, means the service delivery will deteriorate in terms of quality. Rising costs are also associated with the demand for higher wages due to inflation and fuel costs as base stations run on diesel due to power cuts that have crippled industry.
MNOs’ ability to keep increasing tariffs to sustainable levels is also hampered by declining spending power among consumers and government’s close monitoring given the strategic nature of the industry.
The controls could eventually see players unable to provide service.
A source at Telecel said service delivery at the network has been affected by power cuts.