Zimbabwe’s Internet Penetration Rate Registers Optimistic Increase

By Wallace Mawire

Zimbabwe’s internet penetration rate has increased from 60.6% in 2019 to 73.3% as of 31 December 2023,according to Never Ncube,Chief Executive Officer for Dandemutande,an ICT solution provider company operating in Zimbabwe in a recent presentation at a Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) stakeholders engagement indaba held in Harare on 4 April,2024 under the theme:Enhancing price transparency and quality of service for telecommunication services in Zimbabwe.

  According to Ncube,the World Bank estimates that a  10% increase in broadband penetration  leads to 2 to 3 % in GDP growth. This is also expected to propel  growth in the African economy.

  Ncube says that in today's digital age, access to the internet is not just a luxury but a fundamental necessity for socio-economic development.

 ‘It serves as a gateway to information, education, communication and economic opportunities,” he said.

  He added that regionally, Africa’s ICT market was estimated to grow from US$95.4bn in 2020 to US$104.2bn in 2023, which is a compounded annual growth rate of 4.5% according to the International Data Corporation (IDC).

  He said that the current average internet penetration rate in Africa is an average of 48,4 % with Southern Africa having the highest percentage of 67.8%, while East Africa has the lowest at 26.7%. 

  According to Ncube, the telecommunications sector has in Zimbabwe undergone significant growth and transformation in recent years, with advancements in technology and increasing demand for connectivity.

  ‘’There has been a significant increase in the number of Zimbabweans with access to telecommunications services, including mobile phones and the internet,”Ncube said.

  According to the Annual Postal and Telecommunications Sector Performance Report for 2023, the total number of active internet and data subscriptions as of 31 December 2023 was 11,240,969.

  This is said to  translate  to a 13.4% increase from 9,914,950 active subscriptions, as of 31 December 2022.

  He says that this growth in connectivity has facilitated greater communication, access to information and economic opportunities for individuals and businesses across the country.

   Ncube said that the telecommunications industry in Zimbabwe has shown resilience and adaptability, embracing innovative technologies to improve service delivery.

  For instance,he says that mobile money platforms have gained widespread acceptance, revolutionizing financial transactions and providing greater access to banking services, especially in the  rural areas.

  “There have been notable investments in telecommunications infrastructure, including the expansion of mobile networks and the deployment of fibre optic cables. Telecommunications capital expenditure in 2023 experienced a growth rate of 242.9% from 2022 which reflects significant increase. Efforts have also been made to reform the regulatory framework governing the telecommunications sector in Zimbabwe. These reforms aim to promote competition, protect consumer interests, and create a conducive environment for investment and innovation in the industry,”Ncube said. 

  However, according to Ncube, despite the progress, there are some overaching challenges which the sector is grappling with to overcome.

 He says that in Zimbabwe, like in many other parts of Africa, providing widespread and reliable internet access poses significant challenges.

  He says that at the core of these challenges are insufficient infrastructure and communication networks, as well limited hardware devices which enable participation in the networks.

  He said that overarching challenges which cannot be ignored include access, affordability, poor customer experience as well as bureaucracies which are hindering interoperability.

  In terms of access, Ncube says, a major challenge is the inadequate telecommunications infrastructure, particularly in rural and remote areas.

  ‘’Limited access to electricity and the high cost of infrastructure development poses significant hurdles for Internet Access Providers (IAPs) in expanding their networks to these underserved regions. Some of these hurdles result in poor customer experience which is hard to circumvent. The numerous power outages result in network downtime. As a result, customers are continuously demanding compensation for the period of outages,”Ncube said.

   He added that the matter of affordability is centred on the high costs associated with replacement of the infrastructure as compared to the tariffs being charged hence system providers are pulling out of Zimbabwe due to perceived risk in the country.

  In addition,Ncube says, the different network technologies, topologies and protocol make it difficult to have interoperability.

 He says that the pricing structure of services is not conducive to support profitability in the sector. He added that the unstable and rapidly depreciating exchange rate means that the value of the ZWL- based (Zimdollar) tariff is eroded quickly such that it soon becomes challenging to provide a good service.

  Fluctuations in the local currency and inflation rates are also reported to be making financial planning and pricing stability challenging.

  Economic factors such as the availability of foreign currency and economic stability are also impacting pricing.

 ‘’Addressing data affordability will be crucial to bridge the digital divide and ensure wider internet access,’’Ncube said.

  Some of the challenges include  limited access to long term finance as well as inadequate foreign currency allocations to fund new equipment for technology upgrades, network expansion and maintenance of core network infrastructure.He says that this results in inadequate infrastructure deployment in some areas.

  It is reported that there is over taxation of telecommunication operators i.e. the SED and VAT, which bears a burden on the consumers. Operators are now being hounded for non-resident’s tax on fees and VAT on imported services for IP Transit imports,vandalism and theft of infrastructure is rife particularly in line with the increase of theft of Fibre and Lithium batteries.  In addition, there are also reports of  network damages being caused by councils and Third-Party civil contractors, which is reported to be  resulting in increased numbers of faults and inability to meet the Quality-of-Service targets for resolving faults.

 Council levies in most towns are said to be an impediment to smooth running of business including imposition of by-laws by councils requiring way-leave rentals from service providers will increase operational costs and hence prices.

  On regulatory framework irregularities,Ncube says that there is high licensing fees contributing significantly to  operational expenses, limiting  flexibility in pricing services competitively.

 ‘’The Regulator is taking unduly long periods to respond to applications for Spectrum allocation to subsisting IAP license holders for rolling out 5G. For example, Liquid applied in May 2023 and is yet to get a response. In addition, requirement for import licenses is unnecessary as these are required even for equipment where it is known that there are no local suppliers,”he said.

  Other issues include  duplications in infrastructure deployment amongst IAPs.

 Human Capital Issues such as poor staff remuneration is reported to be affecting the workforce and causing decreased motivation and engagement and hence a human skills flight.

  Tariffs are being pegged in ZWL whilst employees are requesting to be paid in USD.

  “This is resulting in staff retention issues. The cost of acquiring and keeping skilled workers is high hence the sector is losing highly skilled staff to other countries with stable currencies. Some are even pursuing careers in care work.  There is also a notable technical skills deficiency due to inadequate training in new technologies,”Ncube said.

 He said that another challenge which is faced on a regional front is that of content localization.

 He says that much of the content available on the internet is not tailored to African audiences or languages, limiting the relevance and accessibility of online resources for African users. He adds that the lack of localized content can impede internet adoption and usage in the region.

Ncube however, says that despite the challenges, there are numerous opportunities for Internet Access Providers to make a meaningful impact in Zimbabwe.

 He says that through the use of Universal Access Funds  IAPs can explore additional solutions such as mobile Wi-Fi hotspots and community internet access points to expand reach in underserved areas.

  “This is already evidenced in the setup of Information Centres in remote areas by the regulatory board in conjunction with the Ministry of ICT, Postal and Courier Services. To improve the quality of service in the telecommunications sector, collaboration between industry stakeholders is essential,”he said.

  He says that embracing innovative technologies such as satellite internet and wireless broadband can help bridge the digital divide and extend connectivity to remote areas where traditional infrastructure is lacking.

  He adds that  partnerships with government agencies and non-profit organizations can facilitate the deployment of internet access solutions in underserved communities, fostering economic development and empowering citizens through access to information and resources.

 He also highlighted the need for investing in digital literacy and skills development programmes that  can empower African populations to fully participate in the digital economy.

  He says that by equipping individuals with the necessary skills to navigate the internet, create digital content and utilize online resources, Africa can unlock the full potential of the internet as a driver of economic growth and social development.

  He added that on the deployment of shared infrastructure,the sharing of BTS and national backbone infrastructure gives room to expand  tentacles for service providers to ultimately reduces costs of acquiring infrastructure.

  He emphasised the need for  regulation and standard rates for shared infrastructure.

  On harmonization of taxes,Ncube says that when comparing Zimbabwe's telecommunications sector to other African countries, several distinguishing factors come to light.

 He says that Zimbabwe is one of the six nations in Africa to incorporate excise duty on data, including others like  Lesotho, Mozambique, Tanzania, Uganda and Zambia.  

 He adds that as such these countries are recorded to have the most expensive data charges in the region.

  He says that there is need to for a constructive dialogue with regulators to review the licensing fee structure and explore the possibility of introducing more supportive fiscal policies.

Ncube said that there should be a deliberate effort to offer affordable hardware and devices as the provision of internet relies on such hardware and devices increased education to elevate shared responsibility to look after the infrastructure.  

 Ncube said that despite facing similar challenges such as limited infrastructure and regulatory constraints, Zimbabwe has demonstrated resilience and adaptability in its approach to expanding internet access.

  He says that through strategic partnerships and investments in new technologies, Zimbabwe has the potential to emerge as a leader in the African telecommunications landscape, setting an example for other nations to follow.

  “’The internet plays a vital role in the realization of human development and facilitates the enjoyment of human rights such as the right of information and educations. Addressing the barriers to connectivity will make it easier for the unconnected to use digital services and bring them into the technology era and give valuable tools for development and social integration,”’Ncube said.