Thriving Mobile Networks in Zimbabwe: Will To what extent do consumers experience the advantages?
Rotating in Quarter Three
Hey there! Let's chat about Zimbabwe's mobile network operators (MNOs) in the third quarter of 2024. Here's the lowdown.
Boosted Revenue Streams
MNOs' total revenue swelled by a whopping 17.66%, reaching ZWG 3.40 billion (up from ZWG 2.89 billion in the last quarter). In a country where the economy's been limping, this growth is a major win.
In the past, we've seen bigger revenue hikes during times of currency instability. But given the relatively stable environment of Q3 2024, this growth is impressive stuff. Potraz attributes the increase to a steady exchange rate, which made it easier for businesses and consumers to plan.
The extra dough means MNOs can put more funds into their operations. That's great news for all of us.
Sluggish Cost Increases
While revenue went up, operating costs only floated up by 8.62%, from ZWG 1.48 billion to ZWG 1.61 billion. That means costs aren't rising as rapidly as revenue - either through better cost management or increased prices.
One reason for this efficiency is job cuts. Companies often have high remuneration costs, and when a big player like Econet and EcoCash downsized, it certainly helped limit sector-wide expenses.
Keep in mind, a stabile exchange rate plays a significant role here. In a dual currency economy, equipment expenses (imported and priced in USD) shoot up quickly if the local currency takes a hit. So when the local currency doesn't depreciate much, costs remain low.
Heavy on Investments
The biggest change was in capital expenditure (CAPEX), which skyrocketed by 268%, from ZWG 164.77 million to ZWG 607.07 million. MNOs are pouring a lot of money into network infrastructure upgrades, like moving to faster 4G and 5G technologies.
This spending has three major benefits:
- Improved Services: Better infrastructure means better network coverage, faster speeds, and more reliable services for us.
- Economic Growth: Investments in infrastructure can lead to job creation and economic stimulation. For instance, setting up new base stations or upgrading existing ones requires workers and materials, which benefits local businesses.
- Dual Currency Conundrum: However, these investments come with hurdles in a dual currency economy. Imported equipment is priced in USD, so MNOs need enough foreign currency to foot the bill. If the local currency loses its steam, these investments could become a challenge.
Profitability Shines
The financial health of operators is looking up, with improved profitability ratios. Despite rising expenses, operating costs haven't caught up with revenue growth.
MNOs are navigating their way around their financial roadblocks, finding that delicate balance between revenue growth and cost management. If they can keep this up, they'll be well-positioned for future opportunities - or to splash out on hefty bonuses, if they fancy!
However, if inflation or currency instability gets worse, this balance could go bust.
Why It Matters to You
The revenue and investment spikes suggest that mobile services will probably improve in the near future. Better networks, faster speeds, and improved services are the fruits of these hefty investments.
But one big question remains: affordability. As mobile data use shoots up, especially with unlimited plans on the rise, affordability becomes an issue. We might see a growing gap between the haves and have-nots if the data pricing problem isn't addressed.
While the report suggests that MNOs are becoming more profitable and efficient, they need to strike that balance between infrastructure development and customer affordability to truly succeed. The #DataMustFall chants are still ringing in the air, and that balance hasn't been struck yet.
In the third quarter of 2024, Zimbabwe's mobile network operators (MNOs) not only witnessed a significant boost in their revenue streams but also made substantial investments in technology, particularly in upgrading network infrastructure to 4G and 5G technologies. Despite the increase in expenses, MNOs' financial health is improving, pointing towards a promising development in mobile services, as highlighted in the financial report. However, affordability remains a concern as mobile data usage escalates, and the question of equal access for all rise.
