Telcos bemoan low investment as service declines

THE Telecommunications Operators Association of Zimbabwe (Toaz) says the sector urgently need investment to boost coverage amid poor service delivery.

Over the past few months, mobile users have experienced declining service delivery in voice and data while also bemoaning the rapid increase in the costs related to those services.

In a statement yesterday, Toaz said the sector had been failing to secure foreign currency to upgrade and maintain the networks.

In addition, the sector is dealing with existing debts related to hiring external players in servicing their infrastructure because of the foreign currency challenges.

“Once installed, ICT equipment typically remains functional for a period of 3 to 7 years. The crucial elements of telecommunications infrastructure, mainly consisting of software and hardware, tend to last about 5 years. To ensure these networks operate optimally, significant software updates are required annually and sometimes more frequently, for the networks to continue to function optimally,” Toaz said.

“These updates, crucial for maintaining network performance, require significant investment in foreign currency. Without continuous investment, most of the equipment is rendered obsolete and unable to continue to carry the network capacity requirements for which it was designed.”

Toaz said that it was working with the Ministry of ICT, Postal and Courier Services and the Postal and Telecommunication Regulatory Authority of Zimbabwe.

The sector said data consumed increased more than five-fold to 117,21 petabytes from 35,73 in the period 2019 to 2023. This increase in traffic reflects the pricing dynamics of mobile data in the country, where prices have come down significantly over time,” the sector said.

“Social networking sites, which account for over 60% of data, are the most popular applications. This near five-fold increase in consumption since 2019 demonstrates an urgent need for enhanced investment in network capacity, leading to quality and service issues that can be resolved through comprehensive investment strategies aimed at addressing underserviced areas as well as boosting coverage and capacity in the cities and towns.”

Toaz said significant commitment had been demonstrated by all critical stakeholders which the association believed would go a long way in addressing some of the challenges facing the sector.

“The telecommunications sector is facing a significant challenge due to the need for substantial foreign currency investments, in an environment where foreign currency is scarce. Additionally, the sector is grappling with foreign currency debts from financing infrastructure prior to 2018,” Toaz said.

“The current economic climate offers no long-term financing options, and there is a pressing need for such funding for capital projects. Ongoing consultations aim to find solutions that will ensure that the sector remains operational and can sustain itself over time.”

The association added that the inability to charge cost reflective tariffs was also making it difficult to raise capital as individual players in the market.

Last year, mobile operators reported capital expenditures of ZWL$191,87 billion, up from ZWL$16,91 billion in the prior year.

However, these amounts were negligible as the local currency depreciated by over 500% and 700% in 2022 and 2023, respectively.