2 MOBILE OPERATOR REVENUES, MARKET SHARES AND PRICES Table 1: Operator revenue (USD ‘000 000) Table 1 shows that the telecommunication revenue has been decline in Mozambique, and has only started recovering in 2017. This is very concerning at a time when massive investments are required to build out next generation networks and to get broadband coverage across the country. The decline in the sector’s revenue is attributed to a significant drop in the fixed line revenue, which dropped by 83 percent between 2011 and 2016. While the mobile sector revenue increased in the periods 2011 and 2014, it declined from there, reaching its lowest level in 2016. The decline in mobile revenue may be attributable to pricing pressure from the third entrant, Movitel, in the saturated voice market, while operators in Mozambique have not transitioned to generating significant revenues from data as they have in more mature mobile data markets. In 2011, the incumbent, mCel, controlled 63 percent of the mobile revenue. Due to competitive pressures from Vodacom and Movitel, mCel was unable to sustain its dominance in the market. Vodacom increased its revenue share from 36 percent in 2011 to 52 percent in 2016, ultimately becoming the dominant operator in the market. 2011 2012 2013 2014 2015 2016 2017 Vodacom 192 237 217 305 214 171 247 mCel 339 300 282 212 149 71 62 – 68 106 172 129 88 99 TDM 246 116 116 109 82 41 50 Total 775 721 721 798 574 370 458 Movitel Source: Ministry of Transport and Communications/Instituto Nacional das Comunicações de Moçambique (INCM), 2017 The low-cost service strategy adopted by the third entrant, Movitel, helped it to win a significant revenue share, primarily from mCel, gaining about 11 percent in 2012 and subsequently increasing its revenue share to 27 percent in 2016, leaving mCel with only 21 percent of the total mobile revenue (see Figure 3). In 2018, Vodacom Mozambique reported an increase in its revenue (20%) to reach MZN17.6 billion. The increase in Vodacom’s revenue is mainly because of strong growth in its voice revenue, up by 18.5 percent. In the same period, Vodacom subscribers increased 70 63 61 Percentage 53 35 49 39 37 52 46 44 44 36 32 30 24 18 17 26 21 2011 2012 2013 2014 Vodacom 24 15 11 0 27 MCel 2015 2016 2017 Movitel Figure 3: Revenue share of mobile operators Source: RIA calculation using INCM data, 2017 Mobile operator revenues, market shares and prices 3