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Financial Gazette (Harare)
May 3, 2002 
Posted to the web May 3, 2002 
By Nqobile Nyathi, Assistant Editor

ZIMBABWE has witnessed a telecommunications boom in the past few years, but lack of infrastructure and the cost of installing it continue to hamper the country's efforts to make the means of communication available to the majority of its citizens. According to the International Telecommunications Union, developing countries are narrowing the "digital divide" between themselves and the developed world.

Since 1991, telephone penetration in emerging markets and least developed nations has risen from 3.3 and 0.3 telephones per 100 people respectively to 18.7 and 1.1 per 100 inhabitants versus 49 to 121.1 lines per 100 people in the developed world. In Zimbabwe, telecoms industry experts estimate that telephone penetration has risen from 1.6 per 100 people in the 1990s to between 2.5 and three lines per 100 nationals. "The main factor is the increase in commercial activity in the country," Moncris Consultancy's managing director Christopher Mutsvangwa told the Financial Gazette. "Since independence in 1980, the (majority) black population has been taking part more in commercial activity in this country and this has increased telephone usage."

But experts agree that the telecoms boom in Zimbabwe has been primarily driven by the advent of mobile phone services in the 1990s, which came in when the demand for phones far outstripped supply and the industry was battling a waiting list of over 100 000.

With a subscriber base of more than 300 000, the three mobile phone networks servicing Zimbabwe are said to have more lines than the country's fixed phone network, although it was not possible this week to ascertain how many subscribers are on the fixed system.

The mobile networks have cut through financial constraints to provide services to even low-income groups by introducing innovative products, including pre-paid packages and phone shops that service previously under-serviced high-density and rural areas.
"In less than five years, the three cellular networks have surpassed fixed line phones," Mutsvangwa noted. "They have brought in pre-paid lines where no contract is required and there are no credit checks, which can act as a barrier. You pay for usage in advance and this has allowed many people who were previously out of the market to have access to phones."

Sure Chimbga, spokesman for Econet Wireless, Zimbabwe's largest private mobile phone operator, said: "Econet has seen a massive increase in its subscriber base, from just under 10 000 when the network was launched in June 1998 to nearly 140 000 at present. "The demand for our services is evidenced by the fact that barely four months after launching Zimbabwe's first pre-paid product, Buddie, in September 1998, Econet took over market leadership position ahead of two other operators that had launched almost two years earlier." To a limited extent, mobile phone operators have also enabled Zimbabweans to access the Internet, access which has grown in leaps and bounds since the 1990s.

In 1999, the country was estimated to have 200 000 potential users but was only servicing 40 000. Today subscribers are estimated at more than 100 000. Some of the growth is attributed to the establishment of Internet cafes across the country, which provide Internet and electronic mail access to people who cannot afford these at home or at work. Despite the giant strides to bring telecoms to a growing number of Zimbabweans, both Internet and telephone services are still primarily the preserve of urban areas and of middle and high-income earners.

Although telephone penetration in the country is now estimated at between 2.5 and three lines per 100 people, Zimbabwe is still well below the 16 lines per 100 people said to be the mark of a developed country. There is also still a huge demand for telephone services that has spawned a lucrative secondary market for mobile phone lines, where prices are sometimes five times more than those charged by the networks. The problem, experts say, is the lack of telecoms infrastructure, including phone lines, fibre optic cable and microwave links. "There are a lot of small towns around the country that have big business that need to be connected, but there is no infrastructure to get to these areas," Internet service provider Zimbabwe Online managing director David Behr said.

But since the introduction in 2000 of a telecoms law which set up a regulatory authority, companies have been licenced that are working to improve infrastructure in Zimbabwe. 

One of these is Africom, which says it deals with the "pipelines" necessary for telecoms and which previously could only be provided by the government-run TelOne. But while Africom marketing executive Kennedy Makahamadze says some headway has been made in infrastructure improvement, he admits that parts of the country are still out of reach. "Infrastructure is expensive so initially we're focusing on areas where there is activity, the busy areas like the CBD (central business district), the shopping centres and the business parks," he said.

Mutsvangwa added: "Our costs are simply too high. By World Bank standards, it should cost between US$1 800 to $2 500 to install a new telephone line but we are way beyond that. It costs us US$6 000 to US$8 000." Industry experts however believe Zimbabwe can still take advantage of developing technologies to spread telecoms to more people. These include very small aperture terminals (VSAT) and fibre links that can take advantage of the government's rural electrification programme to bring phones and the Internet to rural areas at less cost. "There are business opportunities that should be taken up by the private sector," Behr agreed.

"The government has got a lot on its plate already now. When the economic situation improves, there is no reason why people shouldn't make money by upgrading some of this infrastructure."