Connectivity costs weigh on ISPs

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THE Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) says the high cost of international Internet connectivity has remained a challenge for domestic service providers, piling on to the myriad challenges faced by the sector.

In a report of the sector’s performance during the second quarter of 2021, which was published this week, Potraz director-general Gift Machengete said the sector has also been facing challenges with inflation, funding as well as subdued demand, among other things.

“The high cost of international Internet connectivity remains a challenge as Zimbabwe is a landlocked country, accessing bandwidth from undersea cables via Mozambique and South Africa,” Machengete said. Unlike other services that may have alternative local supply, the provision of telecommunications also relies heavily on imports mainly in the form of equipment and software licenses, which need to be upgraded from time to time.

“The shift to the auction based foreign currency market system seemingly eased inflationary pressures, but the allocated foreign currency has not been sufficient to meet all network maintenance, upgrade and investment requirements,” the director-general said, adding that the sector is also bedevilled by other challenges such as over-taxation and legacy debts.

Despite the challenges, the report shows that there has been a growth in active Internet and mobile data usage.
Active mobile telephone subscriptions increased by 3,9 percent to 13,5 million during the quarter as Zimbabwe’s mobile penetration rate increased by 3,5 percent to reach 91,3 percent.

The total number of active Internet and data subscriptions increased by 1,9 percent to reach 9,2 million from nine million recorded in the previous quarter, with Internet penetration rate increasing by 12 percent to reach 62,3 percent.

Active fixed telephone lines decreased by 1,7 percent to 245 322 during the period under review from 249 486 in the first quarter of 2021.
Total telecommunications revenues grew by 19,2 percent to $24,7 billion during the period from $20,8 billion in the first quarter of 2021.
On the other hand, costs grew by 12 percent to $14 billion from $12,5 billion.
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