By 
The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ)’s Fourth Quarter Sector Performance Report for 2024 has revealed a surge in the postal and courier sector’s revenues alongside shifts in operating costs and capital expenditure.
According to the report, nominal revenues rose by 92%, while operating costs declined by 77%, and capital expenditure grew by an astonishing 141%.
When adjusted for inflation and currency fluctuations, real revenue growth stood at 25.94%, with operating costs increasing by 16.28%, and capital expenditure contracting by 58.11%.
By Gamuchirai Mapako
This paradoxical combination of soaring revenues and declining operational costs showcases a sector in transformation, grappling with economic volatility, technological disruption, and shifting consumer behaviour. The report provides a detailed look at the factors driving these trends, from the impact of currency devaluation to the rise of digital alternatives and the strategic investments reshaping the industry.
The most striking figure in the report is the 92% nominal revenue growth, which saw postal and courier revenues climb from ZWG 95.9 million in Q3 2024 to ZWG 183.8 million in Q4. However, this growth is largely attributed to the depreciation of the Zimbabwean dollar (ZWG) against major currencies, particularly the US dollar. The report notes that the local currency devalued sharply at the beginning of the fourth quarter, from USD 1: ZWG 13.9987 to ZWG 24.3902. This depreciation had a cascading effect on pricing structures across the sector, as operators adjusted tariffs to mitigate the rising costs of imported equipment and services.
In real terms after accounting for exchange rate fluctuations revenue growth was a modest 25.94%. This still represents a significant expansion, suggesting that demand for postal and courier services remained robust despite economic headwinds. POTRAZ’s report also highlights that while traditional mail volumes declined, courier services particularly international outbound shipments, saw a notable uptick, growing by 36.86%.
While revenues soared, operating costs fell by 77% in nominal terms, a figure that translates to a 16.28% increase in real terms. This discrepancy points to possibly a combination of cost-cutting measures and operational efficiencies adopted by licensed postal and courier operators.
The decline in costs can be partially attributed to reduced volumes in certain service categories. Domestic postal letters, for instance, plummeted by 39.31%, while international incoming letters dropped by 18.81%. These declines reflect the ongoing global trend of digital substitution, where emails, instant messaging, and electronic billing continue to replace physical mail.
However, the sector also appears to have benefited from improved cost management strategies. The report notes that the cost-to-income ratio for postal and courier operators improved by 10 percentage points, from 129% in Q3 to 119% in Q4. This suggests that operators are becoming more efficient in aligning expenses with revenue streams, even as they navigate a challenging economic environment.
The most volatile metric in the report is capital expenditure, which surged by 141% in nominal terms but declined by 58.11% in real terms. This indicates that while operators are investing more in absolute terms, the real value of these investments has shrunk due to inflation and currency devaluation.
The expansion in nominal capital expenditure could signal efforts to modernise infrastructure, particularly in response to competition from digital platforms and new market entrants like Starlink. The report mentions that the total number of operational postal and courier outlets increased slightly, from 503 in Q3 to 511 in Q4, with postal outlets growing by 4.9% while courier outlets declined by 2.1%.
The POTRAZ report underscored digital substitution as one of the several key challenges facing the postal and courier sector. The decline in traditional mail volumes (-27.12% overall) mirrors global trends, as consumers and businesses increasingly rely on electronic communication. This shift has forced operators to pivot toward parcel delivery and logistics services, where demand remains strong.
The devaluation of the ZWG has created a dual-edged sword boosting nominal revenues while eroding real purchasing power. Operators must continuously adjust pricing models to stay afloat, a strategy that risks alienating cost-sensitive customers.
The report also takes into consideration the competition from new entrants, creating a disruptive environment in Zimbabwe’s internet market, intensifying competition among Internet Service Providers (ISPs).
Comments