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Zimbabwe’s TTMS Capability Ensures MNOs Remain Significant Drivers Of Digital Transformation

Why TTMS Regulations

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Zimbabwe’s TTMS capability ensures MNOs remain significant drivers of digital transformation

Zimbabwe’s TTMS capability ensures MNOs remain significant drivers of digital transformation.

Zimbabwe’s TTMS Capability Ensures MNOs Remain Significant Drivers of Digital Transformation

According to the Postal and Telecommunications Regulatory Authority of Zimbabwe's (POTRAZ) annual sector performance report for 2020, Mobile Network Operators' (MNO) operating costs increased to $11.7 billion during the period, up from $2.11 billion the previous year. This is a result of Zimbabwe's rising cost of doing business as a result of inflationary pressures.

To alleviate these pressures, POTRAZ authorized MNOs to increase data, SMS, and voice tariffs by nearly 200 percent. The regulator said that this increase is justifiable because it is a good way of maintaining a balance between service affordability and the viability of mobile network operators.

The September 2020 price adjustment was made in response to a Buddcomm Intelligence Report indicating that hyperinflation was eroding telecom companies' revenue, and was intended to ensure that the three MNOs (Wireless, NetOne, and Telecel) continued to invest in network upgrades, aided in part by government efforts and cash from the Universal Service Fund.

The report noted that the impact of the Covid-19 pandemic and the critical nature of telecom services, both as a means of general communication and as a tool for working from home, will mitigate these pressures.

This can be seen in the MNO's projected revenue increase of over 700 percent ($26.3 billion) in 2020. This was undoubtedly fueled by the pandemic, which resulted in an increase in demand for communication services, specifically data volumes, as consumers adjusted to the new normal.

This year, POTRAZ urged MNOs to continue their efforts to expand access to data services by investing in data infrastructure in order to accelerate the country's digital transformation. Additionally, the regulator seeks to increase competition in the data service market in order to ensure that mobile and internet services are accessible to all.

Gift Machengete, POTRAZ's director-general, explains that measures such as allocating additional 3G infrastructure, developing the National Broadband Plan currently being circulated to stakeholders, and implementing infrastructure sharing initiatives all aim to ensure affordability.

Why TTMS Regulations

This is why the recently published Telecommunications Monitoring System and Revenue Assurance (TTMS) regulations are critical.

It enables the implementation of a cutting-edge technology-based system capable of monitoring telecom traffic effectively and collecting accurate data in real time.

This increases POTRAZ's visibility into market dynamics, which is critical if the company wishes to create a more competitive market.

Historically, African telecom regulators have operated under a self-declaratory regime. However, the information and statements provided by MNOs may be skewed and/or incomplete, resulting in a lack of accurate and comprehensive data.

This impairs the regulator's ability to supervise, resulting in a disconnect between regulations and how operators comply with them.

Which has been demonstrated in recent years by several African telecom regulators imposing severe penalties on operators, resulting in protracted court battles with little resolution.

Another issue in countries where the telecom sector is not sufficiently visible is the rapid growth of grey markets. In the case of mobile devices, these illicit markets are fueled by parallel import and distribution channels for illegal activities conducted by companies with no ties to the legitimate producers and providers.

Each year, billions of dollars in fees and taxes are lost worldwide as a result of illegal termination of international calls that bypass licensed operators' international gateways. These unauthorized international calls are fraudulently terminated as local calls through the use of SIM cards, PBX systems, and Internet-based methods. Telcos attempt to address this grey telephony issue on an individual basis, with varying degrees of success, but with limited overall success.

Sub-Saharan African mobile markets are among the most vulnerable to fraud globally. Ghana, for example, has lost more than $100 million as a result of fraudulent SIM box sales since 2010. According to the Nigerian Communications Commission (NCC), Nigeria loses approximately $60 million per year as a result of SIM boxing, call masking, and refilling.

Experts agree that the rapid advancement of mobile technology has aided in the growth of bypass fraud. This is because SIM boxes can now be programmed to mimic user behavior; a single SIM box can communicate with multiple gateways located across multiple regions, which definitely favors fraud escalation.

The TTMS is a highly advanced regulatory tool, putting POTRAZ in a better position to increase revenue assurance, combat network fraud and enforce billing integrity across all communication networks available in the country.

This capability is in stark contrast to the current reporting system, which leaves potential for fraud open and deprives MNOs and governments of significant revenue.

Zimbabwe's TTMS capability is critical in ensuring that mobile network operators continue to be a significant driver of digital transformation, with mobile and data services at the forefront.