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The country’s Infrastructure Internet Access Provider (IAP) reveals a mixed performance in the first quarter of 2025, with revenues increasing but operating costs and capital expenditures rising at a much faster pace. This is according to the Postal and Telecommunications Regulatory Authority of Zimbabwe (potraz)’s abridged sector performance report for the first quarter of 2025.
According to the data, total IAP revenues grew by 7.87%, from ZWG 2.09 billion in the fourth quarter of 2024 to ZWG 2.26 billion in Q1 2025. However, operating costs surged by 14.93%, while capital expenditure skyrocketed by an alarming 252.39%, raising concerns about profitability and financial sustainability.
The 7.87% increase in IAP revenues suggests a steady recovery in economic activity, likely driven by improved infrastructure usage and possibly higher service demand. The rise from ZWG 2.09 billion to ZWG 2.26 billion indicates resilience in the sector, despite broader macroeconomic challenges such as inflation and currency instability.
By Gamuchirai Mapako
The revenue growth could be linked to increased government and private sector investments in infrastructure, as well as improved collection mechanisms. However, the modest growth rate raises questions about whether it is sufficient to offset the rapidly rising costs associated with operations and capital projects.
While revenues saw a 7.87% uptick, operating costs grew at nearly double that rate 14.93%, climbing from ZWG 1.38 billion in Q4 2024 to ZWG 1.59 billion in Q1 2025. This widening gap between income and expenditure could squeeze profit margins, potentially affecting the program’s long-term viability.
The sharp rise in operating expenses may be attributed to several factors, including driving up wages, fuel, and maintenance costs, increased administrative expenses due to expanded operations and currency depreciation, which may have raised the cost of imported materials and equipment.
The 252.39% surge in capital expenditure, which jumped from ZWG 35.35 million in Q4 2024 to ZWG 124.58 million in Q1 2025 is a major concern. While increased investment in infrastructure is generally positive, such a dramatic rise within a single quarter raises several questions. One of the being if this is sustainable.
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