Although Zimbabwe is among African countries with the highest mobile data costs, the country’s smartphone penetration is rising and now stands at above 50%.
The Alliance for Affordable Internet (A4AI) recently announced that Zimbabwe has the most expensive mobile broadband at US$25 per 1GB as at the end of 2017, which effectively means that the mobile data cost per 1GB accounts for about 33% of gross national income.
Local telco Econet Wireless believes high data costs have not deterred local from purchasing devices, noting an increase in the penetration rates of cellphones and tablets.
“Data growth was propelled by smartphone penetration which increased from about 45% to 50% as at the end of August 2018. Demand for data services remained high,” said James Myers, chairman of Econet.
Industry executives said the internet penetration rate had increased from the 50% as at the end of August to the current 55%.
The country currently levies a 5% excise duty on airtime top-ups and Potraz has continued to lobby the Finance Ministry to reduce this fee which the organisation argued would drive up the smartphone penetration rate.
“At policy level, we believe sector-specific taxes should be reconsidered as the net effect of such taxes is imposing a penalty on consumers for using ICTs,” said Potraz director general, Gift Machengete. “There is, therefore, no doubt that the current tax regime on airtime is hurting consumers, in particular, the bottom of the pyramid consumers.”
Data revenue contributed about 28% to Econet’s mobile network operations revenue of about US$352 million in the half year period to August 31. The digital banking unit, Steward Bank and EcoCash under the company’s FinTech unit also propelled Econet to a 70% rise in overall revenues for the period of US$600 million.
Internet access through smartphones and tablets account for the highest internet uses in Zimbabwe, with official stats showing that LTE, 3G and 2G accounted for more than 90% of the 7.197 million internet connections in the country.
According to the Zimbabwe Revenue Authority ICT equipment, including cellphones and tablets, can be imported free of duty although a 15% Value Added Tax (VAT) is applicable.