Telecoms operators slash capital expenditure

BY MISHMA CHAKANYUKA

ZIMBABWE’S mobile network operators (MNOs) spent $59,5 million in capital investments in 2018 compared to $100,9 million in the previous year as the southern African economy deteriorates, pushing operating costs up.

The country is home to three licensed MNOs, two of which are State-owned NetOne and Telecel, while the third one, Econet, is privately run.

Postal and Telecommunications Regulatory Authority (Potraz) director-general Gift Machengete on Monday told the Parliamentary Portfolio Committee on Information Communication Technology that total operating costs increased by 23,1% from $657,4 million in 2017 to $809,01 million in 2018, taking into account salaries, rentals, fuel and other expenses.

He said investment by the mobile network operators was mainly in base stations in order to improve national coverage.

“All mobile operators increased (the number of) their base stations. Econet had a net addition of 65 base stations, Telecel had eight and NetOne had an increase of two base stations. The total number of base stations invested by mobile operators in 2018 stood at 75,” he said.

The total number of base stations in the country increased by 5,1% to reach 8 805 as at December 31, 2018, from 8 378 recorded as at December 31, 2017.

“In 2018, Second Generation (2G) base stations increased by 139, Third Generation (3G) base stations increased by 213 and Long Term Evolution (LTE) base stations increased by 75,” Machengete said.

Econet was the only profitable operator in 2017.

“In 2017, Econet recorded $132 million profit after tax, while TelOne posted a loss of $7 million, NetOne a loss of $57 million and Telecel a loss of $18,2 million,” Machengete said.

Last month, MNOs told the same parliamentary committee that tariffs were still way below the cost of delivering services despite a recent hike.

About 65% of the costs were currently denominated in forex.

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