eBusiness Weekly
Michael Tome
The years 2022 is past us, it was an eventful year characterised by a fair share of ups and downs economy-wise.
The first half of the year saw excessive pressure on the local currency, as the country like any other fell victim to imported inflation, stemming mainly from the conflict in Eastern Europe.
Consequently, the country experienced runaway inflation, in a great way foreign currency exchange rates moved steeply against the greenback in a very short space of time within the first six months of the year.
As a result, the central bank moved swiftly to reign in the situation which was apparently getting out of hand through the introduction of Mosi-oa-Tunya gold coins and the 200 percent bank policy rate, both of which significantly steered the economic environment to stability in the second half of 2022.
Amongst the key sectors affected by the see-saw in the economy was Information Communication and Technology (ICT).
Many times during the year, the telecoms sector swerved along with the obtaining economic developments and as much as the sector took a battering from brutal economic shifts, it remained resilient and managed to take through some of its intended projects.
Milestones
In the year, the government through the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), managed to license a new broadband services provider “Fibre Connections” whose immediate win was the successful rollout of fibre along railway lines.
The firm managed to lay 1180 kilometers of fibre cables between Victoria Falls and Beitbridge, as the Government moved to ensure the availability of broadband services in rural and underserved communities in the country.
Fibre Connections a wholesale carrier providing connectivity solutions, an arm of the Bandwidth and Cloud Services (BCS) Group was licensed in January 2022.
This is a longed-for development that has the potential to lower data charges in a country like Zimbabwe which has experienced quite higher broadband charges compared to regional counterparts albeit having grown to depend on broadband services lately.
Also, in June the sector’s regulator managed to commission a US$19 million Telecommunication Traffic Monitoring System (TTMS), a technology that will certainly revolutionise the sector’s performance by curbing revenue leakages, improving revenue leakages, and ICT sector’s surveillance and performance.
The deal was commissioned on a Built Operate and Transfer (BOT), model in partnership with Global Voice Group (GVG) a Spanish-based organisation.
TTMS helps in detecting the use of fraudulent lines on a daily basis and helps in aiding operators in eliminating Subscriber Identity Module (SIM) Box Fraud.
SIM Box Fraud is one of the most common types of telecoms fraud worldwide where fraudsters bypass legitimate routes and use VoIP “Grey Routes” to terminate traffic towards GSM gateways located in the destination network.
According to the International Telecommunications Union (ITU), the Sub-Saharan region is among the most affected by SIM Box fraud globally since 2010.
This kind of fraud extensively damages revenue inflows to network operators.
Challenges
Developments in the sector did not go unobstructed as challenges always showed their ugly face during the year, inhibiting the progression of some of the critical projects.
One of the major barriers experienced in the sector was the relentless increase in prices due to inflation during the first half that saw operators lose revenue in real terms as working capital requirements continued to grow at a rate that exceeded income, leading to reduced network investment.
Foreign currency unavailability on the flip side proved to be another significant barrier to the sector’s operations, this position moved the sector to implore Government to prioritise foreign currency allocations to mobile network operators as costs continued to escalate ahead of revenue.
Consequently, this resulted in reduced capital expenditure in US dollar terms in the first half of 2022.
NetOne at its Annual General Meeting sometime in August lobbied for access to more foreign exchange allocations as it sought to meet its forex obligations mainly for loan repayments, maintenance, and payment of support services including fuel.
“The company continues to lobby for the allocation of more foreign currency required for the business to meet its foreign obligations and for delivery of the latest technology to enable the business to offer customers world-class services.
“Vendors for equipment and systems used to run the network also demand payment in foreign currency,” said NetOne board chairperson Susan Mutangadura.
The MNO however, acknowledged that it had managed to receive foreign currency from the central bank albeit not sufficiently.
Also, exchange rate disparities wreaked havoc in the sector as it resulted in rising costs of some projects going above the budgeted figures most times leading to supplementary budgets.
Resultantly players in the sector bemoaned the tariff structure at the time saying they were below viable levels making the cost of doing business high and compromising service delivery.
Contractors also faced some challenges as they could not meet performance targets due to exchange rate disparities.
However, the situation stabilised in the second half of 2022 resulting in better progress in terms of the execution of projects.
Like the greater part of the industry, incessant power outages experienced in the fourth quarter also crippled the sector’s services.
Network challenges apparently emerged as network towers too were subjected to power cuts.
To cover for the unforeseen and prolonged power outages, telecommunications players resorted to alternative sources of power mainly diesel which is expensive thus pushing up cost structures.
Consequently, mobile network operators, have been growing their implementation of green energy projects to curb elevated operating costs stemming from rising energy costs mainly from the use of diesel.
Econet Wireless Zimbabwe chairman Dr James Myers said while the company continued to upgrade its base stations to alternative energy sources to keep service running, the move had seen a rise in operating costs.
“Load shedding has continued to strain our service delivery and increased our operational costs. We continue to upgrade our base stations to alternative power options, notably solar and diesel generators as best as we can within the constraints of foreign currency availability,” said Dr Myers.
Issues to do with load shedding deterred POTRAZ from enforcing the routine Quality of Service check on MNOs given that operators’ quality of service was seriously degraded due to lack of grid power.
Bridging the digital divide
A total of 24 Community Information Centres (CICs) with a provision for free internet access were constructed and launched throughout the year while 32 are still under construction.
According to POTRAZ work is currently in progress with eight sites now above 95 percent of completion and the rest at various stages of completion.
The completed sites are in Rowa, Rusitu, Hombwe, Kapondoro, and Mapanzure Business Centre (Zvishavane) where Containerized Village Information Centre (CVIC) has been installed.
On the enhancement of schools’ connectivity or e-learning, a total of 1117 schools were connected to the Internet under the schools’ connectivity programme while an additional 672 schools and 17 institutions from higher and tertiary institutions including polytechnics and vocational training centres were provided with 12 months bandwidth under the ICTs for disaster management programme.
A total of 4280 computers were disbursed to institutions as the Government continued on the drive to equip computer laboratories at schools.
Likewise, on the e-health drive, a total of 955 health centres were connected to the internet with one year bandwidth subscription paid for through the Universal Service Fund (USF).
The sector players also carried out Tower Relocation Programme which saw the relocation of towers from sites where two or three towers are collocated in order to broaden the network coverage in the country.
While speaking at the official launch of “Fibre Connections” last week POTRAZ Director General Dr Gift Machengete emphasised on the need to embrace and spread the coverage of broadband services in the country given their growing importance worldwide.
“Everything in our lives is going digital, from governance, healthcare, agriculture, education, entertainment, manufacturing, retail, mining, international trade, travel and tourism, sport as well as social life among others. Indeed, broadband access has become the new catalyst for economic growth, job creation, global competitiveness, and a better way of life. It is enabling entire new industries and unlocking vast new possibilities for existing ones,” said Dr Machengete.
Innovation Drive
In propping up the innovations in the ICT sector POTRAZ ran its fifth hackathon in June 2022, which saw 61 innovators qualifying for support under the Innovation Drive.
Additionally, three innovation hubs namely at the University of Zimbabwe (UZ), Harare Institute of Technology (HIT), and National University of Science and Technology (NUST) were awarded funding to the tune of $70 000 000 per university, during the year.
