Report: Zimbabwe Has 97% Mobile Penetration; Growing Market For Banking

Report: Zimbabwe Has 97% Mobile Penetration; Growing Market For Banking

Mobile phones have become the simplest and cheapest mode of communication in Zimbabwe, a Southern African country characterized by a lack of infrastructure, limited electricity supply and poor roads, according to a RadioNetherlands report.

In the past five years, mobile phones have begun providing a means to connect Zimbabwe’s rural population with urban dwellers.

“Access to information and communication technologies is now considered a basic human right and mobile phones have offered the best opportunity to enhance the digital divide which could have prevented it,” said Josham Gurira, an economist at the University of Zimbabwe. “The use of mobile technology has empowered many people and is regarded as a key tool in helping alleviate global poverty.”

Prosper Muripo rents a small space in a general dealer’s shop at the Gotora shopping centre in Zimbabwe’s Mashonaland East province. He is one of the many in rural Zimbabwe who earn a living selling recharge vouchers and charging mobile phone batteries on solar-powered chargers.

“I charge 50 cents to charge a battery for 30 minutes and a dollar for an hour. I also charge non-owners of mobile phones 50 cents to make a one-minute phone call,” Muripo says.

Zimbabwe now has a mobile penetration of 97 percent, according to the Postal and Telecommunications Regulatory Authority of Zimbabwe, a body mandated to issue licences in the postal and telecommunications sector.

“The increase in mobile penetration has been triggered by increased investment in communication infrastructure in both urban and rural areas, meaning that marginalised people can now afford to use mobile phones,” said authority acting director Alfred Marisa.

Mobile phone subscribers in Zimbabwe increased from less than 2 million at the end of 2008 to more than 10.9 million in 2013, according to Frost and Sullivan Growth Partnership Services, an international company that does business research to accelerate growth. The increase came despite the country’s high levels of unemployment.

It is estimated that 72 percent of Zimbabwe’s 12.75 million people live in rural areas, according to the Zimbabwe Statistics Agency’s 2011-2012 Poverty Income Consumption and Expenditure Survey, which was released in June. About 10.7 percent of the rural population is unemployed, according to the report.

Still, the country’s mobile phone subscribers are expected to reach 13.5 million by 2015 and the industry to be worth $1.34 billion by 2016, the report said.

Much of this increased usage has been attributed to a drastic decline in SIM card prices. In 2008, a SIM card cost about $90; now it costs less than $1.

Since 2009, when Zimbabwe adopted a multi-currency regime to beat hyperinflation of the Zimbabwean dollar, Chinese-made mobile phones have become easily available. They cost about $21 on average.

“Business is booming,” said mobile phone seller Sylvester Mbirimani. “Since the multi-currencies system brought economic stability, people have steady incomes and can save to purchase gadgets such as mobile phones, which were (previously) reserved for the rich and elite.”

Telecel Zimbabwe, the country’s second-largest mobile phone operator, has been expanding and upgrading its network over the last two years to access more subscribers in rural areas.

Rural Zimbabweans like Miriam Chauke from Mutare, Manicaland Province, say access to mobile phones has empowered them. Chauke is unemployed, but worked part time as a manual laborer and was able to earn enough money to purchase a SIM card and a cheap mobile phone.

“It now seems that mobile phone use is becoming a basic human right, because they are offering the opportunity to help (close) communication barriers that were present in the past,” Chauke said.

Mobile phones have also compensated for poor banking services in rural areas thanks to mobile banking. Now rural Zimbabweans can bypass the rigid rules of formal banking and make financial transactions. This is a fledgling market as most rural Zimbabweans still mostly use their mobile phones for texts and making calls, the report said.

Mobile phone banking has the potential to become the biggest banking platform in Zimbabwe, said economic analyst Eric Shabangu.

“The rapid spread of mobile phone penetration, as opposed to bank outreach, has created a fertile ground for mobile money to grow in Zimbabwe. Mobile banking could be the platform for rapid financial inclusion of people that now only need mobile phones to access a certain range of essential financial services they never used to get,” says Shabangu.