HomeLocalZim’s internet revolution: Pricing a major constraint

Zim’s internet revolution: Pricing a major constraint


ZIMBABWE is on the verge of an internet revolution, but pricing remains a major deterrent as a majority of the population cannot afford the service.
With an increase in the number of people with internet enabled phones, it was expected that the internet would take off in the country, but somehow the uptake has remained somewhat very slow.
Mobile internet service provider, Econet, estimates that it has 1,8 million people on its broadband service, but this is only a third of the number of subscribers it has.
Econet, for example, charges US$98 for 1 gigabyte (GB) worth of data, while Telecel charges US$48 for the same amount of data. For a country where the majority of people are unemployed, these charges can be equated to an arm and a leg.
This means the country’s main providers of mobile internet are providing the same internet service for two vastly different figures, but some analysts say this could be for marketing reasons.
Put on a regional scale, the charges seem to be even more enormous. MTN in South Africa is selling 2GB worth of data for R189, the equivalent of about US$22.
An official from Econet, who chose to remain anonymous, said with time, Zimbabweans could expect a reduction in internet costs. “Installation of infrastructure is expensive, so costs have to be recouped, but with time and more people on the service, you can expect a reduction in costs,” he said.
However, in other countries, most service providers share costs of infrastructure and by so doing reduce the cost that is passed on to the consumer, but such a structure is yet to take route in Zimbabwe.
Asked why South Africa had far cheaper rates, the official said mobile internet was fairly new in Zimbabwe whereas it was established south of the Limpopo.
In an article, ZOL also blames the small size of the market for the costs of the internet in Zimbabwe.
“Only when Zimbabwe connects hundreds of thousands of broadband lines will we be able to share out those lines at more economical numbers,” the company said.
“Another factor is the density of the population who can afford the internet. Laying out fibre, copper and even radio systems becomes much more cost-effective where there are a large number of customers in a small area — for example with high rise apartment blocks.”
Social media entrepreneur, Thamu Dube, echoing ZOL, said another inhibiting factor was that Zimbabwe used mostly satellite connection for the internet, but with the coming in of fibre links, the cost was likely to fall significantly.
“The system Zimbabwe has been using for years through the Mazoe Earth station is expensive and limited in bandwidth (the amount of data that can be carried). The second system (fibre-optic cable) is far cheaper and offers blazingly fast speeds and greater bandwidth,” the UK-based commentator said
There are, however, cheaper options with a number of internet service providers popping up, but again the initial costs seem to push away a number of people.
ZOL has come up with a product where they provide 1GB for US$20, but the catch is one has to be near the company’s routers, meaning most people do not have access to the service as they live either out of town or far from the routers.
Africom provides a US$25 service for a gigabyte, but one also has to fork out at least US$65 for a modem and that could put away a number of people. Powertel, Yo Africa and TelOne also provide similar services, but initial costs always seem to be a deterrent.
While the world seems to have embraced shopping over the internet, Zimbabwe is lagging very far behind.
The main reason, observers say, is that PayPal, a global payment system, has sidelined Zimbabwe. Since sanctions were slapped on the country, a decade ago PayPal has sidelined the country and any payments that are directed at Zimbabwe are usually frozen in the political quagmire.
Zimbabweans also seem to be comfortable operating in a cash economy and by and large have ignored online payments and the use of Visa and MasterCard services.
Banks have also not made it easy, as they often charge exorbitant fees for these services.
For example, one can expect to pay a minimum of US$3,50 per transaction on MasterCard in Zimbabwe and US$1 monthly for the maintenance of the service, for a country that has a significant population without bank accounts, these charges may be a bit on the stiff side.
So for the foreseeable future, it can be expected that Zimbabweans will stick to using cash, with internet banking and shopping left to those at the upper echelons of the economy.


Subscribers prefer mobile internet


mobile internet, at the moment seems to be the most viable option as subscribers can pay for the amount of internet they want to use rather than a flat monthly fee.
With the popularity of entry level smart phones like Nokia X2, C3 and Asha among others, mobile internet is affordable.
But for the more techno savvy who use iPhones and the Android platform, mobile internet can be a tad too expensive.
For example, for US$1 a person can chat on WhatsApp for more than a week on a Nokia C3, but on a Samsung SII, depending on the number of running applications, one can hardly chat for an hour for US$1.

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