Zambia and Zimbabwe Telecommunications Q3 2019
In this update, both Zimbabwe and Zambia's telecoms sectors continue to perform in line with our forecasts. With veryhigh shares of prepaid subscriptions in both markets, we do not rule out periodic discounting of inactive SIMs. Both markets stillhold organic growth opportunities but 3G/4G services uptake will be the main drivers of the mobile sector through to the end of ourforecast period in 2028. While we maintain our view that the entrance of Zambia's fourth mobile network operator, UZI Zambia, willspur intense price competition, service innovation and network expansions into unserved and underserved areas of the country, it isconcerning that the operator plans to launch services only in the end of 2019 following a series of regulatory and operationaldelays. In the wireline segment, increasing access to mobile technology will hamper growth of fixed-voice subscriptions in bothmarkets. From a risk perspective, continued government intervention in the sector poses a downside risk to our growth forecasts; inlight of the 2018 revised mobile money taxation regime in Zimbabwe, we reiterate our caution against the growing propensity ofgovernment's to impose taxes on the telecoms sector to bolster state revenues.
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