Online Reporter
Business Reporter
TOTAL revenue generated by local mobile network operators in the third quarter of 2024 improved significantly, a situation attributable to a stable exchange rate that prevailed during the period.
The revenue surged by 17,66 percent to ZiG3,40 billion in the third quarter of 2024 from ZiG2,89 billion in the second quarter.
The notable increase in nominal revenues shows growth in real terms, underscoring the beneficial impact of the stable exchange rate during this period.
Furthermore, capital expenditure for operators saw a 268 percent increase, growing from ZiG164,77 million to ZiG607 million during the same quarter.
This rise indicates a bullish investment trend within the telecommunications sector as operators had disposable capital to enhance their infrastructure and services.
Mobile network operators, however, experienced an increase in operating costs, which rose by 8,62 percent to ZiG1,61 billion from ZiG1,48 billion.
Data from the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) third-quarter performance report shows that the financial status of operators improved in terms of profitability compared to the second quarter of 2024.
This situation comes amid an improvement from the past inflationary environment, which once characterised the economy.
Inflationary pressures constrained consumer spending on telecommunications, and information and communication technology (ICT) services. This came as customers grappled with low disposable incomes.
Business uncertainty
This also triggered business uncertainty among players in the telecoms sector as operators grappled with declining earnings due to inflation and an unstable exchange rate.
“Total nominal revenue for mobile network operators grew by 17,66 percent to reach ZiG3,40 billion from ZiG 2,89 billion recorded in the second quarter of 2024 whilst mobile network operators’ operating costs rose by 8,62 percent from ZiG1,48 billion to ZiG1,61 billion.
“Growth in nominal revenues may be indicative of the real growth realised in the quarter due to a stable exchange rate which prevailed during the second and third quarter,” said POTRAZ in its 2024 postal and telecommunications sector abridged performance report for the third quarter.
These developments match Zimbabwe National Statistics Agency (ZimStat) findings that Zimbabwe’s December inflation fell within the 5 percent target set by the Reserve Bank of Zimbabwe (RBZ) and the International Monetary Fund (IMF) projection of 7 percent, signalling significant progress towards the authorities’ objective of durable price stability.
The report noted that prices, measured by the all-items Zimbabwe Gold Consumer Price Index (CPI), recorded an average increase of 3,7 percent from November 2024 to December 2024.
Stringent policies
ZimStat attributed this deceleration in inflation to stabilising prices, a result of stringent monetary and fiscal policies, particularly within the non-food sector.
The December 2024 inflation data shows a positive picture when analysed across the Zimbabwe Gold (ZiG), United States dollar (USD) and weighted metrics.
Annual inflation rate in US dollar terms was at 2,5 percent, reflecting a modest rise in prices throughout the year and further reflecting an improved economic climate in Zimbabwe.
“This means prices, as measured by the all-items USD CPI, increased by an average of 2,5 percent between December 2023 and December 2024,” ZimStat noted in its December bulletin.
This comes as the Reserve Bank of Zimbabwe (RBZ) indicated that it is committed to consolidating currency stability to sustain low inflation and a stable exchange rate.
“The Reserve Bank remains strongly committed to ‘walking the talk’ of prudent money supply management and ensuring that the monetary policy stance is well-calibrated and engenders the desirable conditions of currency and exchange rate stability in the economy,” said RBZ Governor Dr John Mushayavanhu.
