Leading telco’s chief says industry showing resilience from COVID-19

07Jul 2020
The Guardian Reporter
Dar es Salaam
The Guardian
Leading telco’s chief says industry showing resilience from COVID-19

THE outbreak of the novel coronavirus which has caused global concern and economic uncertainty across most sectors as governments, businesses and individuals adopt strategies to cope with unfolding events, the country’s telecommunications industry has remained buoyant.

Vodacom Tanzania Plc’s Managing Director, Hisham Hendi.

Most telcos put in place and executed continuity plans that have involved agile working systems and uptake of digital tools to facilitate work anywhere including remote area. Leading global research firm, Analysis Mason has forecast global revenues for telecoms operators to fall by 3.4 percent year-on-year as the coronavirus pandemic edges the world towards recession.

But in the local market, Managing Director of the largest telco, Vodacom Tanzania Plc, Hisham Hendi thinks that measures put in place by stakeholders earlier had assisted to ward off negative impacts from the COVID-19 pandemic.

Hendi said Tanzania Communications Regulatory Authority has been mindful of the COVID-19 outbreak hence did put in place measures to mitigate a fallout arising from some regulatory requirements.

“As outlined in our preliminary results announcement in May 2020, we barred 2.9 million customers in the last quarter of the year following TCRA’s biometric registration instructions. We have subsequently reconnected 25 percent of these customers in line with the regulations,” said Hendi.

He pointed out that the telco’s preliminary results show that Vodacom had 2.5 million customers who were not biometrically registered whose activities generated on average  4.2bn/- in revenue per month.

“These customers will be barred on instruction from TCRA until such time that their biometric registration is concluded. It is important to note that, as matters stand, the TCRA has suspended further barring of customers in reaction to the COVID-19 pandemic,” the Vodacom chief noted while showering praises to the regulator for the move.

While there are certainly other industries that have been impacted much more severely than telcos, revenues are still under pressure from the wider economic impact such as increasing unemployment caused by the COVID-19 which has resulted into forced business shutdowns and slowdowns. “These trends cannot be ignored,” he noted.

The Vodacom Tanzania chief executive further added that while challenges remain in the short term, he believes that the telco industry is well placed to weather the storm. “We will leverage the strength of our balance sheet and our resilient business model to ensure we continue to innovate and generate efficiencies that translate to value to customers and shareholders alike, while safeguarding performance for the future,” he explained.

Generally, the industry continues to see very good growth of 4G data traffic accelerated by continuous investment in 4G network by companies led by Vodacom hence taping into the surge in smartphone penetration.

“Since the COVID-19 pandemic started, we have seen a modest increase in data traffic as more people work from home, turn to online entertainment and make use of the sites that we have zero rated related such as those offering online education, government services and health,” Hendi stated.

The virus’ presence will push this trend to continue in the short to medium term as more customers practice social distancing through various initiatives such as work from home while using technology to remain connected, educated and entertained.

Hendi’s arguments are seconded by Vodacom’s M-Pesa Director, Epimack  Mbeteni  who said although the market’s leading mobile money platform may be impacted in the short term, in the longer term the coronavirus pandemic could prove to be a catalyst for increased uptake of digital financial services.

“Mobile money services like of M-Pesa promote contactless payments, a crucial element in curbing the spread of the virus. It also facilitates the movement of money across the economy where people may have restricted movement,” Mbeteni said.

“M-Pesa also encourages contactless purchase of airtime, ensuring recharges can still occur while people and businesses remain connected,”  he added stressing that in compliance with regulations covering the biometric registration requirements earlier this year, the telco industry has successfully wade off the biggest challenge for 2020.