Chronicle Editor
Senior Business Reporter
Zimbabwe’s Postal and Telecommunications Regulatory Authority (POTRAZ) has expressed optimism that the telecommunication sector will experience service uptake and growth in the third quarter of the year largely driven by the appreciation of the local currency against US dollar and improvement in power supply.
In an abridged postal and telecommunications sector performance report second quarter, the regulatory authority acknowledges that the quarter under review was characterised by high inflationary temperatures that were felt across all the sectors.
The sector operator revenues and operating costs surged by margins over 100 percent across all sub-sectors of the postal and telecommunications industry.
“Most of the operators incurred operating costs growth which was more than their revenues growth in the second quarter of 2023. This directly means that most operators made losses in the trading quarter,” reads part of the report.
The report highlights that the telecoms industry requires huge capital outlays across networks, however, investments per operator have drastically decreased due to reduced revenue-to-cost ratios (RCR).
“This situation is attributed to an eroded tariff coupled with high inflation during the trading period. In light of all the challenges that did not affect only the sector but the economy as a whole, the Regulator and sector remains optimistic that a positive sector growth can be realised in the coming quarter notwithstanding post-election expectations.
“The recent policy measures taken by the Ministry of Finance during the last month of the second quarter have brought stability to the exchange rate and the inflation rate.
“Tight monetary and fiscal policy measures are expected to further stabilize the macroeconomic environment. Inflation is also expected to ease further into the remainder of the year subject to policy consistency which could also boost operator revenues in real terms.”
Potraz said the appreciation of the local currency against the US dollar is expected to reduce the import prices of bandwidth, network equipment and software.
Added to that, it noted that improvement in power supply owing to the commissioning of the Hwange unit 7 and 8 power stations is expected to enhance the overall quality of service whilst reducing costs related to backup power on base stations.
“Service uptake is expected to rise in the forthcoming quarter hence growth of the sector in the third quarter of the year.”
Bongani Ndlovu
Online Reporter