Currency woes squeeze Zimbabwe’s mobile operators
... as costs outpace revenues
SAMANTHA MADE.
Zimbabwe’s mobile network operators (MNOs) suffered a sharp decline in profitability during the first quarter of 2025, as surging costs driven by exchange rate volatility and regulatory burdens undermined their earnings, a new industry report has revealed.
The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), in its Q1 sector performance report, said mobile telecom operators were severely affected by macroeconomic pressures, reflecting a broader trend of financial strain across various sectors of the economy.
“At a global level, the cost to income ratio worsened significantly by 16,85 percentage points in the first quarter of 2025, signalling a decline in profitability by the MNOs,” Potraz said.
The cost-to-income ratio, which indicates how much it costs to generate each dollar of revenue, stood at 59,84% during the review period. This means for every ZiG earned, operators spent nearly 60 cents.
The report comes amid a slew of gloomy data across key sectors.
Potraz noted that despite a growing demand for data services and continued migration from voice to data-centric consumption, the rising cost structure is weighing down operators.
“Total revenue for mobile network operators declined by 4,2%, from ZWG6,42bn to ZWG6,15bn in the first quarter of 2025,” Potraz reported.
This drop is partly attributed to the seasonal nature of consumer spending, which peaks in the festive quarter and contracts at the start of the year.
“Higher revenues in the previous quarter might have been driven by increased consumer spending due to the festive season, while back-to-school demands could have affected consumers’ spending power in the quarter under review,” said Potraz.
At the same time, MNO operating costs jumped by 33,46%, from ZiG2,8 bn in Q4 2024 to ZiG3,68 bn in Q1 2025, putting further pressure on profit margins.
The impact was also visible in investment activity. Capital expenditure for mobile operators dropped significantly—down 50%, from ZWG842,2m to ZiG423,81m—as firms scaled back spending to manage operational strain.
“This is attributed to the growing demand for data services and enhanced internet connectivity, as well as the continued shift in consumer preference from consumption of voice-centric services to data-centric services,” Potraz noted.
Mobile internet and data services have now overtaken voice as the primary source of revenue for the industry, accounting for 50,28% of total MNO earnings during the quarter, up from 48,91% in the previous quarter.
Potraz statistics show mobile internet/data traffic surged by 17,31%, from 97,19 petabytes in Q4 2024 to 114,02 petabytes in Q1 2025. In contrast, total mobile voice traffic grew modestly by 5,38% to 4,2 bn minutes.
There was also a marginal rise in internet/data subscriptions—up 0,45%, from 11,89m in Q4 2024 to 11,94m in Q1 2025.
However, despite the growth in subscriptions, the internet penetration rate dropped by 1,37 percentage points, from 77,55% to 76,19%, due to a 1,6% increase in population, which outpaced the growth in subscriptions.
Similarly, the broadband penetration rate declined by 1,15 percentage points, from 75,52% to 74,37%, for the same reason. Potraz explained that even if subscriptions grow, penetration rates fall when population growth outpaces them—since penetration is calculated as a ratio, not an absolute count.
Nonetheless, the regulator remains optimistic about the sector’s medium-term outlook.
Efforts to strengthen digital infrastructure are underway, including the accelerated rollout of 5G base stations, which rose 53,33% in Q1. Potraz expects this to lay the groundwork for improved connectivity and service quality.
Looking ahead, Potraz said the sector is well-positioned for recovery and growth, supported by new technologies and stabilizing economic indicators.
“With the ZiG exchange rate showing signs of stability, a more favourable operating environment is anticipated, instilling confidence in continued sector development throughout 2025,” the regulator said.
Further growth is expected to be driven by the entrance of low earth orbit satellite internet providers and the increasing adoption of emerging technologies such as artificial intelligence and machine learning, which are set to redefine network efficiency and service innovation.
