Unstable economy shatters postal and telecoms industry

HARARE – Zimbabwe’s volatile economic situation, characterised by steep operating costs driven by high inflation and an unstable local currency, have combined to throttle the postal and telecommunications sector, a report has observed.

In its 2023 first-quarter sector report, the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), revealed that despite recording an increase in the total revenue, operational costs within the sector were high.

“Total revenue generated by the postal and courier sector increased by 23,5 percent to record ZWL5,74 billion from ZWL4,66 billion recorded in the fourth quarter of 2022; operating costs increased by 28 percent to record ZWL5,45 billion, from ZWL4,26 billion recorded in the fourth quarter of 2022,” read the report.

Potraz attributed the spike in operating costs and revenues to the country’s inflationary operating environment.

“The economic environment directly affects the performance of the postal and telecommunication sector,” the regulator said.

“The inflationary environment, unavailability of credit, reduced consumer spending, and inadequate foreign currency amongst other challenges continued to beset the sector.”

The regulator also identified unstable electricity supply as a hindrance to the sector.

“The situation has been aggravated by prolonged load-shedding, impacting overall quality of service, and raising the cost of service provision.

“Inadequate foreign currency has affected network expansion and maintenance efforts.

“Unlike other services that may have alternative local supply, the provision of telecommunications relies heavily on imports, mainly equipment, software as well as bandwidth.”

Potraz called on the government to prioritise the sector in terms of government expenditure, resource mobilisation, and foreign currency to enable it to operate at its full capacity.

According to the report, the sector recorded a 16 percent decrease in mobile voice traffic to record 2,5 billion minutes in the first quarter of 2023 as compared to 3 billion minutes recorded in the fourth quarter of 2022.