By Jonathan Mbiriyamveka
HARARE – Zimbabwe’s telecommunications sector is experiencing a paradox of growth, with a surge in digital adoption masking a severe profitability squeeze for operators, the latest regulatory report reveals.
Data released by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) for the third quarter of 2025 shows that while Mobile Network Operators (MNOs) saw revenues grow by 8.35% to ZWG 7.27 billion, their aggregate operating costs skyrocketed by 19.71% to ZWG 4.16 billion.
This sharp divergence, where costs are rising more than twice as fast as income, is ringing alarm bells for the financial sustainability of the networks underpinning the country’s digital economy.
“The numbers tell a story of success under strain,” said telecommunications analyst Tawanda Chikwezvero.
“Subscriptions and usage are up, which is positive, but the operators are essentially running faster just to stay in place.
‘The margin compression is severe. If this trend continues, it will inevitably impact network investment and quality of service.”
Compounding the concern is a simultaneous and dramatic collapse in capital expenditure. MNOs slashed their infrastructure spending by a staggering 67% quarter-on-quarter, from ZWG 1.53 billion to ZWG 508.9 million.
POTRAZ described the reduction as “notable,” framing it as part of the sector’s cyclical investment pattern and a function of fund availability.
However, industry observers warn that such a sharp pullback could stall crucial network upgrades needed to handle the very data boom driving revenues. Mobile internet traffic jumped 10.72% to 144.09 Petabytes, while fixed internet traffic saw an even stronger 18.39% increase.
“This creates a dangerous catch-22,” explained an industry executive who spoke on condition of anonymity. “We need to invest in more base stations, fibre optics, and spectrum to improve coverage and capacity for our growing customer base. But the very economic pressures driving our costs—likely inflation, currency instability, and high energy prices—are the same ones making that investment incredibly difficult to finance.”
The report highlights a nation increasingly reliant on connectivity. Active mobile subscriptions grew to over 16.4 million, and internet penetration climbed to 82.87%. This digital hunger stands in stark contrast to the traditional postal sector, where volumes plummeted by 18.15%.
POTRAZ, in its outlook, remained optimistic, linking the sector’s growth to the recently approved National Artificial Intelligence strategy. It emphasised the continuous deployment of LTE and 5G technology as key to digital inclusion.
But the immediate financial data presents a more sobering picture. The sector’s ability to build the “technological backbone” for a future AI-driven economy may hinge on resolving the current imbalance between booming digital demand and the strained finances of the companies tasked with meeting it.
“The vision is clear: a digitally transformed Zimbabwe,” concluded Chikwezvero. “The question now is whether the financial model of the telecoms sector is robust enough to turn that vision into reality.”
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