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Wednesday, May 29, 2024

Mobile telecommunication operators invest over ZWL$26 billion in capital projects

Story by Stanley James, Business Editor

THE country’s telecommunications sector continues to receive massive support with the latest statistics showing that close to ZWL$26 billion was invested in capital projects by mobile telecommunication firms in the second quarter of this year.

A Postal and Telecommunications Sector Performance Report for the second quarter of this year indicates that the mobile operators riding on an over 170% growth in revenues, devoted part of the income to long-term capital projects.

Some of the projects that accounted for capital spending include upgrading of base stations, investment in new machinery and equipment as well as infrastructure.

Economic experts say the investments indicate investor confidence in the capital-intensive but viable telecommunications industry.

“Of course, there are some challenges emanating from the high operating costs however, if these firms are also spending on capital projects, then it means that they are targeting long-term growth indicating their commitment to continue operating in the country,” said an investment analyst, Mr Tino Kashamba.

University of Zimbabwe Business School director, Professor Albert Makochekanwa said, “Any form of capital expenditure forms the basis of industrial growth, the fact that they are seeing it necessary to invest then it means they are in a position to unlock shareholder value and hedge against any form of instability in the near future.”

The report however reveals that the future viability of the mobile telecommunications sector depends on sustained stabilisation of the local currency exchange rate.

Takeaways from the report include a 3,2% rise in active fixed telecoms lines, a 0,7% drop in mobile subscriptions, an 11,6% rise in mobile internet and data traffic, as well as an over 240% increase in revenues generated by the postal and courier services.

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