Factors affecting the profitability of mobile money services in Zimbabwe

The introduction of mobile money services in Zimbabwe has been met with limited success as compared to other emerging markets such as Kenya, Uganda, and Philippines. The first mobile money service to be launched in Zimbabwe collapsed whilst the second has struggled to reach traction. The mobile money service that has managed to scale, has however not been profitable despite registering the fastest growth in terms of the number of subscribers registered. Thus, the main objective of the research was to investigate the factors that affect the profitability of mobile money services in Zimbabwe. A review of literature on areas that have a bearing on the profitability of mobile money services such as business models, revenue and cost drivers, mobile money value chain, key success factors (KSF), industry driving forces, pricing and commissions was undertaken in order to gain a better understanding of existing literature and in what direction new research should take. The review highlighted that there was a gap in literature, as there was no conceptual framework on mobile money profitability. A quantitative research methodology was used through the administration of structured questionnaires to respondents from the three mobile network operators in Zimbabwe were the response rate was 67%. Interviews were also conducted with the Reserve Bank of Zimbabwe. The data was analysed using SPSS version 16 where tests such as regression analysis and correlation were conducted. The findings revealed that there was a positive relationship between establishing a customer pain point; understanding mobile money value chain; leveraging on key success factors; understanding revenue and cost drivers and the profitability of mobile money services. Also, tests revealed that there was a negative relationship between challenges and profitability. It was therefore recommended that to be profitable, mobile network operators in Zimbabwe should establish a customer pain point, understand their value chain, leverage on key success factors, understand revenue and cost drivers, and mitigate challenges. A need for further research may extend the analysis by exploring more factors as well as geographical coverage of the study