Internet and e-commerce industry in Zimbabwe

Today we are to talk about the country named as “Dzimba dza mabwe” by its inhabitants. In English it sounds like "great house of stone”. Located in Southern Africa, Zimbabwe, has English as one of three official languages; it is the country Internet and e-commerce level of progress of which we are to scrutinize. Zimbabwe is a landlocked country located in the southern part of the continent of Africa, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia to the northwest and Mozambique to the east. Meantime, Zimbabwe still remains one of the poorest countries, mainly because of the long war for independence from the United Kingdom, the colony of which it used to be for the century. Since 2000 the country has been going trough tremendous collapse, suffering the results of such economic blows. Though tourism in Zimbabwe has suffered decline, the country still attracts tourists by its major amazing nature and tourist attractions, like Victoria Falls.

Meantime, the world is being developed, and the progress in Internet and communication technologies sector also influences this poor African country. However, Zimbabwe’s deep economic crisis affected badly the deployment of ICT infrastructure, dampening and slacking the advancement.

The progress can be reflected by the internet penetration level surge. At present, Zimbabwe is amid Africa top 10 Internet countries, occupying the last position, with only 12.4 million current users, that makes up almost 11% of the population. That may be compared to 0.3% penetration in 2000 and 6.7% in 2008. Though the users volume increase for the decade is considerably high, 2,742 %, the penetration level still remains very low.

Over the last several years the number of Internet Service Providers in Zimbabwe has grown significantly, owing to the public and business community subscription. That is the result of tremendous expensiveness of telephone services. So Internet became the easiest and cheapest way of communication between Zimbabweans inside the country and abroad. Thus, charge for sending or receiving an electronic message is between $200 and $250 a minute and all allow subscribers to spend a minimum of 10 minutes while an international call costs between $3800 and $5800 per minute, according to www.internetworldstats.com data.

The most recent membership list on the Zimbabwe Internet Service Providers Association (ZISPA) Web site comprises 28 ISPs. The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) oversees ISP licensing. Licenses cost $2-4 million, depending on the level of service the ISP wishes to provide, adding 3.5% percent of the ISP’s annual gross income.

The first country’s ISP is Data Control, established in 1996. Eventually it changed names to Internet Unlimited and was then bought out by Econet Wireless and named Ecoweb Internet. Company’s activities provided a technological first in Southern Africa, being the Sister company of UUnet Internet Africa born in South Africa. This operator was based upon the Red Hat Linux 5 operating system which was the fastest at that time. Later on it was upgraded to Red Hat Linux 6 and a radius server was implemented. Most of the Dial-in lines came in via Livingstone Portmaster modems and the Commercial links were accessed through Licence-free 2.4 GHz wireless WaveLAN.

The other large Internet operator is the government-owned communications company TelOne, which is not a part of ZISPA, represents the largest national ISP, being a monopoly. The operator provides bandwidth to most other ISPs in the country.

In 2006 international satellite communications provider Intelsat cut service to TelOne after the company failed to pay its $700,000 debt. TelOne requested money from Zimbabwe’s Reserve Bank to pay the debt, but the money was delayed for several weeks, making users suffer connection problems. Service was restored after the reserve bank paid the outstanding debt.

Meantime, financial troubles continued affecting the company. Thus, last year, TelOne raised its monthly service charges from less than $30 to $300. Such a price shock affected both individual Internet subscribers and Internet cafés throughout the country, many of whom were forced to cancel their subscriptions and, the cafés have to be shut. So, the country’s Minister of Information and Communication Technology ordered TelOne to reduce the prices. Thereafter, the government unveiled its intention to privatize the company as part of its attempt to revitalize the country’s economy.

The other large ISPs in Zimbabwe are:

• Africaonline
• Ecoweb
• Telconet
• Zimbabwe Online
• Zimweb
• ComOne
• NetOne, TelOne’s subsidiary
• TeleAccess
• Afritell

The ISP market is reasonably becoming competitive with six major players. Eight companies were licensed in 2009 to provide VoIP telephony services. Several operators have been licensed and are rolling out national fibre backbone networks. Wireless broadband access networks are also been rolling out, and the first 3G mobile broadband service was overwhelmed by demand within weeks of the August 2009 launch.

Zimbabwe’s Internet country code top-level domain (ccTLD) is .zw. However, no web sites have been registered directly under .zw, instead the Zimbabwe Internet Service Providers Association allows registration under .co.zw. Two years registartion agreement is relatively expensive - $299, as shows www.rwgusa.com.

Besides the registry directly under several second-level domains and under third-level domains beneath second-level categories is also available:

• .ac.zw registrations are being taken by the University of Zimbabwe. Applications are handled by this institution's Computer Centre. As with the general norm, .ac.zw registrations are for academic institutions.
• .org.zw registrations are taken by the country's fixed telecommunications provider, TelOne. These are intended for use by NGOs, individuals and such like organisations but any restrictions are not clear.

Relatively successful deployment of ICT infrastructure led to the development of e-commerce sector. Nevertheless, 10 years economic contraction constrains e-business rolling out.

Meantime a host of electronic and Internet-based services have found their way on Zimbabwe’s market. Among them are e-banking, electronic money transfers, electronic bill payments and electronic product purchases.

But the high cost of developing business solutions is one of the important factors that could be restricting some potential players from joining e-commerce business. E-business solutions reportedly cost several millions.

Targeting to reach an electronically-based economy, Zimbabwe could revolutionize the way in which people trade and improve income and quantities of goods traded between regional trading partners. Successful development of electronic commerce is supposed to help the country to retain its position as southern Africa’s second largest economy. Hopefully, a stronger base in electronic business could help to improve country’s position. Zimbabwe’s e-commerce sector deployment could also diminish the gap separating African countries from the rest of developed world, and possibly increase the level and quantity of trade between the regions.