The Influence of Digital Transformation on the Financial Performance of Telecommunications Firms: A Case of Airtel Zambia
DOI:
https://doi.org/10.59413/ajocs/v6.i5.2Keywords:
Digital transformation, Digitalization, Financial Performance, Digital Literacy, Digital Capability, Digital Investment, TelecommunicationsAbstract
Zambia's telecommunications industry has in the recent past witnessed notable growth, which has been driven by digital transformation initiatives. Despite this progress, the influence of digital transformation on financial outcomes in Zam-bia's telecommunications sector remains under researched. This study sought to examine the influence that digital literacy, organizational digital capability, and digital investment have on financial performance, focusing on Airtel Zambia as a case study. Utilizing the Resource-Based View, Dynamic Capabilities Theory, and Disruptive Innovation Theory, the study employed a descriptive research design, with data being collected from a sample of 97 employees using a structured questionnaire. Quantitative analysis, including descriptive and inferential statistics, was applied. The data was analyzed using regression and correlation analyses to determine the relationship between the independent variables (digital literacy, digital capability, and digital investments) and the dependent variable (financial performance). The results showed that digital literacy had a Pearson correlation coefficient of 0.442 at (sig. 2-tailed) < 0.01 while digital capability and digital investments had Pearson correlation coefficients of -0.171 at (sig. 2-tailed) < 0.01 and 0.425 at (sig. 2-tailed) < 0.01, respectively. The interpretation of the regression analysis revealed that the independent variables collectively explained 25.3% of the variability in financial performance. Regres-sion results demonstrated that digital capability and digital investments significantly and positively influenced financial performance with Beta coefficients β = 0.341 and β = 0.34 (p < 0.05), while digital capability exhibited a weaker and insignificant impact with a Beta coefficient β = 0.066 (p > 0.05). The research findings underscore the need for telecommunications companies to prioritize employee digital literacy and to align organizational digital capabilities with their strategic goals. The study concludes that Airtel Zambia and similar tele-communications firms that are undergoing digital transformation should pay attention to which digital technologies they invest in and cultivate digital capabilities if they are to sustain growth, competitiveness, and maximization of profits.
Downloads
References
Adeniran, T. & Johnston, K., 2012. Investigating the dynamic capabilities and competitive advantage of South African SMEs. African Journal of Business Management, 6(11), pp. 4088-4099.
Ahmad, M. U. & Murray, J., 2019. Understanding the connect between digitalisation, sustainability and performance of an organisation. International Journal of Business Excellence, 17(1), pp. 83-96.
Ahmada, H. & Mustafa, H., 2022. The impact of artificial intelligence, big data analytics and business intelligence on transforming capability and digital transformation in Jordanian telecommunication firms. International Journal of Data and Network Science , 6(1), p. 727–732.
Airtel Zm, 2015. Annual report and financial statements, Lusaka: Airtel Zambia.
Airtel Zm, 2022. Annual report and financial statements, Lusaka: Airtel Zambia.
Airtel Zm, 2023. 2023 Annual Report, Lusaka: Airtel Zm.
Ali, M. M., Norman, S. Z., Ghani, E. K. & Haron, N. H., 2018. The influence of risk management on construction project performance: a case study. The Journal of Social Sciences Research, p. 936–942.
Al-Mamary, H. H., Shamsuddin, A. & Aziati, N., 2015. Investigating the key factors influencing on management information systems adoption among telecommunication companies in Yemen: The conceptual framework development. International Journal of Energy, Information and Communications, 6(1), pp. 59-68.
Almukaha .A, A. M., 2020. Risk Management of Construction Projects. Journal of Engineering .
Alrabadia, T. D. S., Talibb, Z. M. & Abdullah, N. '. B., 2023. The role of quality 4.0 in supporting digital transformation: Evidence from telecommunication industry. International Journal of Data and Network Science , 7(1), pp. 717-728.
Alsafadi, Y. A., 2018. Benefit of Digital Transformation for Telecommunication Organaization. Journal of Marketing and Consumer Research, 42(1), pp. 50-56.
Altheide, D. L. & Schneider, C. J., 2013. Qualitative media analysis. 2nd ed. s.l.:SAGE publications.
Alwan, M. & Alshurideh, M. T., 2021. The impact of customer service digitalization on customer satisfaction: Evidence from telecommunication industry. International Journal of Data and Network Science, 5(4), pp. 815-830.
Amoah, C. & Pretorius, L., 2019. Evaluation of the impact of risk management on project performance in small construction firms in South Africa: The case study of construction systems. Journal of Engineering, Design and Technology.
Asadi, Z., Pourramzan, I. & Moulai Heshchin, N., 2015. The role of participation in the rural development of the dry part of Bijar, Rasht city. . Space Economy & Rural Development Quarterly, 5(1), pp. 61-83.
Aune, J. B., 2000. Logical Framework Approach and PRA-mutually exclusive or complementary tools for project planning?. Development in Practice, 10(5), pp. 687-690.
Badom, L., 2016. Project monitoring and evaluation: a critical factor in budget implementation, infrastructure development and sustainability.. , Makurdi, Benue State, Nigeria, s.n.
Banaitiene, N. & Banaitis, A., 2012. Risk management in construction projects. Journal of Risk Management–Current Issues and Challenges, p. 429–448.
Barney, J. B. & Wright, M., 2001. The Resource-Based View of the Firm. Journal of Management, 27(3), p. 625–641.
Barney, J. B., 1991. The resource based view of strategy: Origins, implications, and prospects Origins, implications, and prospects. Journal of Management,, 17(1), p. 97–211..
Berman, S. J., 2012. Digital transformation: opportunities to create new business models. Strategy & Leadership, 40(2), p. 16–24.
Boateng, A., Ameyaw, C. & Mensah, S., 2020. Assessment of systematic risk management practices on building construction projects in Ghana. International Journal of Construction Management, pp. 1-10.
Bryman, A. & Bell, E., 2007. Business research methods. 2nd ed. s.l.:Oxford university press.
Bughin, J., Catlin, T., Hirt, M. & Willmott, P., 2018. Why digital strategies fail. Mckensey Quarterly, pp. 1-15.
Cenamor, J., Parida, V. & Wincent, J., 2019. How entrepreneurial SMEs compete through digital platforms: The roles of digital platform capability, network capability and ambidexterity. Journal of Business Research, pp. 196-206.
Central Statistical Office, 2007. Annual report, Lusaka: Central Statistical Office.
Chanias, S., Myers, M. D. & & Hess, T., 2019. Digital transformation strategy making in pre-digital organizations: The case of a financial services provider. Journal of Strategic Information SystemsJournal of Strategic Information Systems, pp. 17-33.
Chaplowe, S., 2008. Monitoring and Evaluation Planning: Guidelines and Tools. Catholic Relief Services. s.l.:s.n.
Chesula, O. W. & Kiriinya, S. N., 2018. Competitiveness In The Telecommunication Sector In Kenya Using Porters Five Forces Model. International Journal of Research in Finance and Marketing, 11(3), pp. 2231-5985.
Chihana, L. E., 2018. A STUDY ON TELECOMMUNICATION TOWER SHARING AMONG MOBILE NETWORK OPERATORS IN ZAMBIA, Lusaka: UNZA press.
Christensen, C. M., 1997. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business School Press, 5(2), pp. 1-23.
Christensen, C. M., Raynor, M. & McDonald, R., 2015. What is disruptive innovation?. Harvard Business Review, 93(3), p. 44–53.
Coff, R., 1999. When competitive advantage doesn’t lead to performance: The resource-based view andstakeholder bargaining power. Organization Science, 10(2), p. 119–133.
Creswell, J. W. & Poth, C. N., 2018. Qualitative inquiry & research design: Choosing among five approaches. 4th ed. s.l.:SAGE publications.
Davenport, T. & Westerman, G., 2018. Why do so many high-profile digital transformations fail?. Harvard Business Review, 9(15).
Deep, G., 2023. Digital transformation's impact on organizational culture. International Journal of Science and Research Archive, 10(0), p. 396–401.
Deka-Zulu, B., 2022. dailynation. [Online] Available at: https://dailynationzambia.com/2023/01/telecommunications-the-case-ofmobile-network-operators-in-zambia-part1/[Accessed 20 september 2023].
Dudovskiy, J., 2018. Business research methodology. [Online] Available at: https://research-methodolgy.net/research-methodology/ethical-considerations/[Accessed 15 September 2023].
Duman, C. & Meral Akdemir, B., 2021. A study to determine the impacts of industry 4.0 technology components on organizational performance. Technological Forecasting and Social Change, Volume 167.
Ekung, S., Lashinde, A. & Adu, E., 2021. Critical Risks to Construction Cost Estimation. Journal of Engineering, Project & Production Management.
Empirical Economics, 2022. The Impact of COVID-19 on Digital Investments in Emerging Markets: A Comparative Analysis. Empirical Economics , 65(4), pp. 1234-1256.
Eurydice, 2019. Publications Office of the European Union. [Online] Available at: https://eacea.ec.europa.eu/national-policies/eurydice/content/digital-education-school-europe_en [Accessed 18 November 2024].
FRACTAL, 2024. PREPARING FOR INCREASED FLOODING. Policy Brief , 1(1), pp. 1-8.
Goh, C. S. & Abdul-Rahman, H., 2013. The identification and management of major risks in the Malaysian construction industry. Journal of Construction in Developing countries, pp. 19-32.
Gorjian, M. & Peter, M. K., 2022. Digital Strategizing: The Role of the Corporate Culture.. Open Journal of Business and Management, 10(6), p. 2821–2835.
Grobusch, L. C., 2023. Enhancing community flood resilience in Lusaka’s. Master's Thesis, 1(1), pp. 1-62.
GSMA, 2023. The Mobile Economy Sub-Saharan Africa 2023, New York: GSMA.
Gyamfi, T. A., Pratt, L. & Nana-Addy, E., Consultant Perspective . Assessing the Effect of Risk on Public and Private Construction Projects Performance in Ghana. 2018.
Hanelt, A., Bohnsack, R. M. D. & Antunes Marante, C., 2021. A Systematic Review of the Literature on Digital Transformation: Insights and Implications for Strategy and Organizational Change. Journal of Management Studies, 58(5), p. 1159–1197.
Hapompwe, D. C., Simushi, C. & Sichoongwe, K., 2021. An Assessment of the Impact of Covid-19 on Small and Medium Enterprises (SMEs) in Lusaka, Zambia.. International Journal of Scientific and Research Publications, 11(6).
Helfat, C. E. & Winter, S. G., 2011. Untangling dynamic and operational capabilities: Strategy for the (N) ever-changing world. Strategic Management Journal, 32(11), p. 1243–1250.
Hess, T., Matt, C., Benlian, A. & Wiesböck, F., 2016. Options for formulating a digital transformation strategy. MIS Quarterly Executive, 15(2).
Higgins, K., Huscroft-D’Angelo, J. & & Crawford, L., 2019. Effects of technology in mathematics on achievement, motivation, and attitude: A meta-analysis. Journal of Educational Computing Research, 57(2), pp. 283-319.
Hotlan, S., Tarigan, Z. J. H. & Jie, F., 2021. Supply Chain Integration Enables Resilience, Flexibility, and Innovation to Improve Business Performance in COVID-19 Era. Emerging Emergencies and Sustainability: The Role of Supply Chain and Logistics), 13(9).
Hough, J., 2025. Barron's. [Online] Available at: https://www.barrons.com/articles/t-mobile-stock-beats-verizon-att-bigtech-e9aa5541?utm_source=chatgpt.com. [Accessed 5 January 2025].
Idoro, G., 2012. Influence of the monitoring and control strategies of indigenous and expatriate Nigerian contractors on project outcome. Construction in Developing Countries, 17(1), pp. 6-14.
Ifeoma, A. R., Phina, O. N., Nwanonigwe, A. G. & Uchechukwu, E. S., 2021. Digital Transformation and Business Sustainability of Telecommunication Firms in Lagos State, Nigeria. Journal of Economics and Finance, 12(3), pp. 10-15.
Jewitt, C., Clark, W. & Hadjithoma-Garstka, C., 2011. The use of learning platforms to organise learning in English primary and secondary schools. Learning, Media and Technology, 36(4), p. 335–348.
Kabika, J., Habanyama, M. K. & Mwiinga, L., 2024. Effects of Climate Change-Induced Flooding on Onsite Sanitation Services: A Case Study of Kanyama, Compound in Lusaka, Zambia. African Journal of Climate Change and Resource Sustainability, 3(1), pp. 98-115.
Khin, S. & Ho, T. C., 2018. Digital technology, digital capability and organizational performance: A mediating role of digital innovation. International Journal of Innovation Science, 11(2), pp. 177-195.
Kinyanjui, E., 2021. Afribary. [Online] Available at: https://afribary.com/works/influence-of-digital-transformation-processes-on-customer-relationship-management-among-commercial-banks-in-kenya [Accessed 5 12 2024].
Lin, L. & Lv, W. D., 2019. The effect ofdigital transformation on management reform of manufacturing enterprises: A case study based on Kutesmart and Haier.. Scientific Decision Making, 25(1), p. 85–98.
Mai, L. T. T. & Hoan, T. X., 2022. Research Framework of the Factors Affecting the Success of Digital Transformation for Vietnam Telecom Industry. World Wide Journal of Multidisciplinary Research and Development, 8(4), pp. 48-51.
Manita, R., Elommal, N., Baudier, P. & Hikkerova, L., 2020. The digital transformation of external audit and its impact on corporate governance. Technological Forecasting and Social Change, 150(4), pp. 119-151.
Marinich, M., 2020. Relationship between Risk Identification, Risk Response, and Project Success , Minneapolis: Walden University.
Masengesho, E., Wei, J., Umubyeyi, N. & Niyirora, R., 2020. A Review on the Role of Risk Management (RM) and Value Engineering (VE) Tools for Project Successful Delivery. World Journal of Engineering and Technology, p. 109–127.
Merriam, S. B. & Tisdell, E. J., 2016. Qualitative Research: A Guide to Design and Implementation. s.l.:Jossey-Bass.
Merriam-webster dictionary, 2023. merriam-webster. [Online] Available at: https://www.merriam-webster.com/dictionary/resilience [Accessed 4 September 2023].
Minister of Technology and Science, 2023. National Digital transformation strategy, Lusaka: s.n.
Mithas, S., Tafti, A. & Mitchell, W., 2013. How a firm's competitive environment and digital strategic posture influence digital business strategy. MIS Quarterly, 37(2), pp. 511-536..
Modise, E., 2023. techcabal. [Online] Available at: https://techcabal.com/2023/08/02/felix-mutati-zambia-tech-interview/ [Accessed 18 September 2023].
Mudenda, M. S., 2017. IMPACT OF OUTSOURCING ON QUALITY OF SERVICE ON CELLULAR MOBILE PROVIDER: A CASE OF AIRTEL ZAMBIA, Lusaka: UNZA press.
Mudenda, S. H. M., Banda, I. N., Banda, I. N. & Lungu4, K. A., 2022. Community Challenges and Needs in Sanitation, Related to Flooding Disasters in Peri-Urban Areas: Case of Kanyama - Zambia. International Journal of Science and Research (IJSR).
Mudenda, S. H. M., Banda, I. N., Tembo, J. M. & Agabu, K. L., 2022. Government institutional emergent issues and gaps in disaster management mechanisms for WASH: a case study of Zambia's Kanyama peri-urban area. Journal of Water, Sanitation and Hygiene for Development , 12(7), p. 563–574.
Mukosa, F. et al., June, 2020. the impact of covid-19 on small scale businesses in zambia. Banking and Insurance Academic Journal, 2(6).
Muthama, A. K., 2016. Total quality management and performance of mobile telecommunication firms in Kenya. Nairobi: Doctoral dissertation, University of Nairobi.
Mwangu, A. & Iravo, M., 2015. How monitoring and evaluation affects the outcome of constituency development Fund Projects in Kenya: a case study of projects in Gatanga Constituency. International Journal of Academic Results, Business and Social Science, 5(3), p. 13–31.
Nambisan, S., 2016. Digital entrepreneurship: Toward a digital technology perspective of entrepreneurship. Entrepreneurship theory and practice, 41(6), pp. 1029-1055.
Nguyen, L. H. & Watanabe, T., 2017. The impact of project organizational culture on the performance of construction projects. Journal of Sustainability, pp. 781-782.
Nguyen, N., Skitmore, M. & K.W, J., 2009. Stakeholder. impact analysis of infrastructure project management in developing countries: a study of perception of project managers in state-owned engineering firms in Vietnam. Construction Management & Economics, 27(11), pp. 1129-1140..
Nguyen, T., 2024. Awareness of Digital Transformation, Satisfaction, and Intention to Engage in Online Learning: A Study of Vietnamese Students. Journal of Information Systems Education, 35(2), p. 218–231.
Obondi, K. C., 2020. The impact of project risk audits on construction project success. Journal of Engineering Management and Competitiveness (JEMC), 10(2), p. 103–115.
Oliveira, d., de Souza, J. A. & de Oliveira, M. P. V., 2023. Analysis of Studies on Digital Strategy: Bibliometric Research of Scientific Production. Sustainability , 16(20), p. 8789.
Oswakwe, P. N., April 2021. COVID-19 and the Challenge of Developing Productive Capacities in Zambia. UNCTAD Research Paper , 1(63).
Pallant, J., 2011. SPSS survival guide: A step by step guide to data analysis using SPSS. 4th ed. Crows Nest NSW: s.n.
Palmatier, R. W. & Sridhar, S., 2017. Marketing Strategy: Based on First Principles and Data Analytics. 1st ed. London: Palgrave Macmillan.
Phiri, A., 2014. Creating a model in community based disaster risk management for informal settlements : a case of Kanyama Settlement, Lusaka - Zambia. Thesis submitted for the degree Doctor Philosophiae in Public Management and Development at the Potchefstroom Campus of the North-West University.
PMI, 2013. Managing Change in Organizations: A Practice Guide. Project Management Institute, pp. 11-15.
Porter, M. E., 1991. Towards a dynamic theory of strategy.. Strategic Management Journal, 12(2), p. 95–117.
Porter, M., 1979. How Competitive Forces Shape Strategy. Harvard Business Review, 57(1), pp. 137-145..
Prabu, S. S. & Krishna, C., 2017. Effects of Risk Management on Project Performance. The Asian Review of Civil Engineering, pp. 40-42.
Renault, B., Agumba, J. & Ansary, N., 2018. An exploratory factor analysis of risk management practices: A study among small and medium contractors in Gauteng. Acta Structilia, p. 1–39.
Roduner, D., Schläppi, W. & Egli, W., 2008. Logical Framework Approach and Outcome Mapping, A Constructive Attempt of Synthesis.. Rural Development News,, 2(1), pp. 1-24.
Sabiel, I. A., 2020. The Role of Formal Risk Management Practices in Construction Projects’ Success: A Case Study of Qatar, Minneapolis: Capella University.
Sasaki, S., 2009. Impact of Drainage Networks on Cholera Outbreaks in Lusaka, Zambia. Am J Public Health, 99(11), p. 1982–1987.
Saunders, M., Lewis, P. & Thornhill, A., 2012. Research methods for business students.. 2nd ed. s.l.:Pearson education limited.
Schwertner, K., 2017. Digital transformation of business. Trakia Journal of Sciences, 15(1), pp. 388-393.
Seku, L., Aigbavboa, C. & Thwala, W., 2016. An assessment of factors affecting risk management in South African Construction Industry. Johannesburg. University of Johannesburg Institutional Repository.
Srinivasan, A. & Venkatraman, N., 2018. Entrepreneurship in digital platforms: A network‐centric view. Strategic Entrepreneurship Journal, 12(1), pp. 54-71.
Stankovski, D. & Radev, D., 2021. Key steps and parameters for Digital Transformation in big Telco organizations. Telecommunications, Informatics, Energy and Management, 6(1), pp. 50-56.
TechTrends, 2023. Techtrends. [Online] Available at: https://www.techtrends.co.zm/airtel-launches-5g-network-in-zambia/ [Accessed 5 November 2024].
Teece, D. J., Pisano, G. & Shuen, A., 1997. Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), p. 509–533.
Teerakul, B., Rongsayamanont, C., Darnsawasdi, R. & Kosolsaksakul, P., 2023. A Combined DPSIR Framework and Logical Framework Approach for Sustainable Water Resources Management in the Lagoon Floodplain.. Environment & Natural Resources Journal, 21 (3), pp. 211-221.
Tembo, D. K., 2021. AN ASSESSMENT OF THE EFFECT OF SERVICE QUALITY (SQ) ON CUSTOMER, Lusaka: The University of Zambia.
Timotheou, S. et al., 2022. Impacts of digital technologies on education and factors influencing schools' digital capacity and transformation: A literature review. PubMed central, 28(6), p. 6695–6726.
Tom Heath, A. P. K. W., 2010. How to Climate Proof Water and Sanitation Services in the Peri-Urban Areas in Lusaka. WSUP, pp. 1-28.
UNDP, 2020. Mitigating the Socio-economic Impact of Covid-19 in Zambia: a rapid assessment. CUTS international.
VINTILĂ, L.-O., POPESCU, D. & BÎRSAN, A.-N., n.d. DIGITAL TRANSFORMATION AS EVOLUTION OF THE ORGANIZATIONAL COMMUNICATION MANAGEMENT IN THE TELECOMMUNICATIONS INDUSTRY.
Wa-Mbaleka, S., 2018. Writing your thesis and dissertation qualitatively: Fear no more. 1st ed. s.l.:Oikos Biblios Publishing House..
Wandeto, P., 2023. The effect of digitalization on the operational efficiency of telecommunication firms in Kenya. Nairobi: Strathmore University.
Wang, Y., Wang, T. & Wang, Q., 2024. The impact of digital transformation on enterprise performance: An empirical analysis based on China’s manufacturing export enterprises. PLoS ONE, 19(3).
World Bank, 2023. Digital Economy for Africa., Washington: World Bank.
Wright, P. J. et al., 2023. Leveraging digital technology for social connectedness among adults with chronic conditions: A systematic review. Digital Health, Volume 9, pp. 8-18.
Zhai, H., Yang, M. & Chan, K. C., 2021. Does digital transformation enhance a firm's performance? Evidence from China. Technology in Society, 10(4), pp. 18-41.
Zhang, T., Shi, Z.-Z., Shi, Y.-R. & Chen, N.-J., 2019. The effect ofdigital transformation on management reform of manufacturing enterprises: A case study based on Kutesmart and Haier. Scientific Decision Making, 25(01), p. 85–98.
ZICTA, 2023. INFORMATION AND COMMUNICATION TECHNOLOGIES SECTOR 2023 MID-YEAR MARKET REPORT, Lusaka: ZICTA.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Cholwe Mbilima, Jackson Phiri (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
