NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, July 8, 2016

Zimbabwe’s deflated economy is impacting on the country’s telecommunications industry and has forced operators to leverage promotions to reduce service tariffs. The local economy is battling severe cash shortages and resulted in a daily limit on withdrawals of approximately US$200.

The government is drumming up usage of plastic money and mobile money to help ease the cash crunch. It will also introduce bond notes (local currency backed by a $200 million Afreximbank facility) in October as a way of incentivising exporters and dealing with the cash shortages.

While the internet has emerged as a ‘cash cow’ for mobile companies amid declining voice revenues, executives are reviewing their promotions to reduce mobile and mobile internet charges – but are equally adamant that the approach must generate profit.

Douglas Mboweni, chief executive officer of Econet Wireless, said “Any promotion should give value to customers and also make business sense.”