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

Friday, November 6, 2015

The aggressive expansion of Zimbabwe’s mobile telecommunications industry had become ever greater in the past six years after radical measures to arrest hyperinflation and economic decline were implemented in 2009. Finance Minister, Patrick Chinamasa’s liberal policies back then in February 2009 redefined growth prospects for a country that had known nothing other than frustration and turmoil in a decade.

From Dotito in the sprawling Mashonaland Central region to the drought ravaged Mahenye in the remote southern districts, branded mobile phone shops are now decorating sun baked landscapes as the country’s three mobile phone firms, Econet Wireless, Telecel Zimbabwe and the State-controlled NetOne, flex it out in a battle for subscribers and clients that has sometimes swung into fierce commercial clashes.

Vast amounts of capital and equipment have been imported to satisfy a rising hunger for mobile phone services, which has been boosted by the rise in mobile money transfer services. NetOne says since 2009, it has invested over US$214 million in network expansion.

The mobile money transfer business is expected to grow as Zimbabweans, fleeing economic turmoil but sending back home millions of dollars to take care of millions facing starvation, will soon gain access to more options to remit funds to Zimbabwe.

Through the growth that has ensued, vast economic benefits have accrued, with Econet alone revealing recently that its vast network supporting 9,2 million subscribers has created 35 000 employment opportunities for individuals selling airtime recharge cards, work in 250 branded shops, 19 000 dealer agents and 1 100 green kiosks. EcoCash, Econet’s mobile money transfer solutions provider, says its footprints can now be traced to 20 000 locations countrywide, in one of the most remarkable growth stories for a single sector since 2009.

At times, the growth of mobile telecoms has been controversial, but it has been at the core of the country’s struggle to recover. But now economic slowdown and excessive regulatory fees and charges, an unpredictable environment and the extraordinary growth in social media platforms, are beginning to take their toll on the mobile phone industry, with 18,6 million combined subscribers.

The growth of new technologies, such as Skype, Facebook, Whatsapp and others have altered the way consumers interconnect, shop and socialise. This is threatening the growth of the industry, whose rise had coincided with a rising population of urbanised youths.