POTRAZ Q1 2025 Report: Zimbabwe Mobile & Internet Sector Trends

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has released its Abridged Sector Performance Report for the First Quarter of 2025, offering a comprehensive look into the nation's evolving telecommunications sector. The report highlights significant shifts in mobile, fixed, and internet services, revealing both growth areas and challenges that impact the everyday lives of Zimbabweans.

Mobile Sector Growth

The mobile telephony sector continues to be a cornerstone of Zimbabwe's digital landscape. The report indicates a 1.38% increase in active mobile subscriptions, rising from 15,677,094 in Q4 2024 to 15,893,626 in Q1 2025. This growth, however, is tempered by a slight decline in the mobile penetration rate, which fell by 0.87 percentage points from 102.26% to 101.39%. This decrease is primarily attributed to an annual increase in the estimated population figures, which now stand at 15,675,158 according to ZIMSTAT projections.

A closer look at individual operators reveals a mixed bag of fortunes. Econet and NetOne both registered subscriber growth, with Econet increasing its base by 2.17% and NetOne by 0.38%. In stark contrast, Telecel experienced a significant downturn, losing 11.69% of its subscribers during the quarter. This shift is also reflected in market share, with Econet gaining 0.56 percentage points to reach 72.85% of the mobile subscriber market, while NetOne and Telecel saw their shares decline.

Mobile voice traffic also saw an overall increase, rising by 5.38% from 3.98 billion minutes to 4.20 billion minutes. This growth, despite the increasing popularity of data-based communication, is largely attributed to on-net bundles and promotions offered by mobile network operators (MNOs) to stimulate voice usage.

Data Consumption Soars, but Profitability Concerns Emerge

Perhaps the most striking trend in the report is the continued surge in mobile internet/data traffic. The first quarter of 2025 witnessed a substantial 17.31% increase in data traffic, escalating from 97.19 Petabytes (PB) in Q4 2024 to an impressive 114.02 PB. This exponential growth underscores the increasing reliance of Zimbabweans on digital platforms for communication, entertainment, and information. Econet led this charge with a 20.68% increase in data traffic, followed by NetOne with 5.23%. Telecel, however, again bucked the trend with an 18.26% decline in data traffic.

Despite the booming data consumption, the financial health of MNOs presents a concerning picture. Total revenue for MNOs declined by 4.20% from ZWG6.42 billion to ZWG6.15 billion. This revenue dip is juxtaposed against a significant 33.46% increase in aggregate operating costs, which rose from ZWG2.8 billion to ZWG3.68 billion. Furthermore, MNO capital expenditure saw a sharp 50% decrease, falling from ZWG842.20 million to ZWG423.81 million. This widening gap between declining revenues and escalating costs, coupled with reduced investment, signals potential challenges for the long-term sustainability and expansion of mobile services.

Fixed Telephony and Internet Services: Niche Growth and Starlink Impact

The fixed telephony sector saw a marginal increase of 0.91% in active subscriptions, reaching 300,748. However, fixed tele-density declined slightly due to population growth. Traditional Public Switched Telephone Network (PSTN) voice traffic continued its downward trend, contracting by 6.56%, as consumers increasingly opt for Over-The-Top (OTT) communication applications that leverage internet connectivity.

In the internet and data services sphere, total active subscriptions increased by 0.45% to 11,942,857. However, similar to mobile penetration, the internet penetration rate saw a slight decrease of 1.37 percentage points to 76.19%, again influenced by population growth. Broadband penetration also experienced a minor decline.

A notable highlight in this segment is the remarkable growth in VSAT subscriptions, which surged by 32.02%. This significant increase is directly attributed to the rising adoption of Starlink services in Zimbabwe. This trend suggests a growing demand for alternative internet access solutions, particularly in areas where traditional infrastructure may be limited or unreliable.

Internet Access Providers (IAPs) also experienced financial shifts. Total IAP revenues grew by 7.87% to ZWG2.26 billion. However, operating costs for IAPs increased by 14.93%, and capital expenditure saw a substantial 252.39% increase, indicating significant investments in infrastructure or operational adjustments within this segment.

Infrastructure Development: The 5G Push

Efforts to enhance connectivity and network speeds are evident in the continued deployment of advanced infrastructure. The report highlights a significant 53.33% increase in 5G base station deployments, underscoring MNOs' commitment to bringing next-generation connectivity to the country. While Econet maintains its dominance in overall base station infrastructure, the focus on 5G expansion points towards a future with faster and more reliable internet services.

Conclusion

The Q1 2025 POTRAZ report paints a dynamic picture of Zimbabwe's telecommunications sector. While mobile and internet data consumption continues its upward trajectory, driven by evolving consumer habits and the proliferation of smartphones, the financial health of MNOs faces headwinds from declining revenues and rising costs. The emergence of Starlink is reshaping the internet access landscape, particularly for underserved populations. As Zimbabwe navigates its digital transformation, these trends will undoubtedly continue to shape the accessibility, affordability, and quality of telecommunication services for its citizens.