How the Econet device fire sale is actually a great thing for the operator

Econet is selling $24 smartphones. So what, big deal. It’s probably just another case of aggressive retail tactics in an extremely challenging market.

The logic behind this seems pretty obvious. We know that the only a few other things, like pop music hits and yesterday’s news outpace mobile phone tech in terms of losing relevance very quickly. That’s likely to be the major reason why Econet is going all out here.

Econet gets to dispose of devices that are not as relevant right now as newer devices with better specs enter the market. In the process, it moves stock with prices that no longer match the latest mobile hardware tech. As an example, Huawei’s Ascend Y220, with its 2013 tech can’t go up against other more recent entry level smartphones with a $70 tag.

What’s interesting though is that this fire sale caused by the need to adapt to ever changing mobile hardware patterns is actually a good thing for Econet. It gives Econet, as a mobile network operator, a chance to give its subscribers that are not on the internet the devices to do that.

Sure, we may beat our drum because of an impressive mobile penetration rate, but the same can’t be said for our smartphone penetration. The frustrating bit for mobile operators and everyone eyeing the gold at the end of the internet rainbow (including Econet services with its foray into e-commerce) is that not enough people are accessing the internet right now.

We still haven’t received the latest figure from POTRAZ, the telecoms industry regulator, or from the mobile networks; but judging from official figures like the 15% disclosed by Econet last year and some feedback from social media, as well as an upward trend that we have noticed over the past 2 years, Zimbabwe’s smartphone penetration is likely to be moored between 20 and 25%.

This number can only go up if more subscribers are given access to affordable devices that give them that connection to the internet. This goal towards smartphone penetration carries a lot of significance for local telecoms when you consider that more than 95% of internet connections are made on mobile devices.

Another plus for Econet is the fact that a faster distribution of smartphones, even entry level ones that can get subscribers to use Over The Top services like WhatsApp and Facebook bundles, means a shot at boosting Average Revenue Per User. This is very important for the operator because of trimmed revenues from voice communication that have been affected by state regulation.

All things being considered, this action taken by Econet because of the nudge it has received from ever-changing consumer tech is turning out to be a good thing. Let’s just hope the benefits realised help the operator focus on the lower end of the market with a lot more entry-level smartphones.