Telecoms sector close to collapse

26 Sep 2003

Zimbabwe’s main telecoms operators warned yesterday that an acute foreign currency crisis, high inflation and low tariffs have brought the industry close to collapse. According to the managing director of Econet Wireless Zimbabwe, many operators in the country depend on foreign currency for the bulk of their revenues – 95% in Econet’s case – and the depreciation of the Zimbabwean dollar has led to severe problems. Econet is racking up around USD3 million in network maintenance every year but is still struggling to keep up with the latest software and technology. Mboweni said that his company has been forced to stop expanding its subscriber base due to problems associated with network costs, while all three cellcos in the country – NetOne, Telecel Zimbabwe and Econet – have suspended international roaming in a bid to cut back on the outflow of foreign currency resources. Despite efforts from the three operators to increase tariffs with the rate of inflation, they remain below average as a direct result of the regulator’s refusal to approve adjustments.