Econet in record $78m profit

HARARE - Zimbabwe's biggest telecommunications firm Econet Wireless reported a 6,8 percent surge in half-year earnings to $78 million, driven by subscriber growth following a $63,1 million investment to expand its mobile phone network.

Douglas Mboweni, Econet chief executive told analysts that the growth was necessitated by accelerated penetration of fibre broadband infrastructure and continued rollout of new features for the business’ innovative products and services.

Broadband subscribers increased by 75 percent to reach 2 537 710 compared to  1 448 000 in the corresponding period last year.

“The drive to build superior network infrastructure is motivated by the objective to give our subscribers an unparalled customer experience and create sustainable long term growth prospects for the business,” he said.

The Econet boss noted that his company has invested $677 million in the last three years, which has impacted positively on economic development and resulted in employment creation.

“The additional investment made in the last six months has resulted in network capacity being upgraded from 6,4 million to 7,1 million subscribers,” he said.

“Over 50 percent of the new sites commissioned in the last three years were in new coverage areas, further enhancing the accessibility of mobile telecommunications to all people in Zimbabwe.”

Expansion of the 3G network resulted in 116 new 3G babe stations being commissioned and this greatly supported the massive uptake in data, resulting in an increase of over 50 percent in data revenue.

In the half year to August, subscriber numbers grew by nine  percent to seven million, driving revenue up to $340 million from $291 million previously.

Total assets grew 7,7 percent to close the period at $875,2 million.

In the period under review Econet also concluded facilities of $307 million.

“$255 million was utilised to refinance existing facilities and $52 million was utilised in further network expansion. The successful capital raising was the most significant capital raising project ever undertaken by a Zimbabwean company.

Mboweni said in the six months reporting period Econet purchased 4 563 021 shares at a cost of $19,4 million.

“This brings the balance of shares held in treasury stock to 10 826 752 shares. The shares held in treasury stock represents six percent of issued share capital of the company as at August 31, 2012,” he said.

The mobile company also acquired the right to a 45 percent interest in TN bank Limited.

Econet did not declare a dividend in light of the $19,4 million invested in treasury share purchase.

Mboweni said while there was still strong demand for voice and data offerings in Zimbabwe, Econet had diversified its revenue streams by introducing a mobile money transfer service which mainly targets people with no access to banking services.

 Econet controls 70 percent of Zimbabwe’s mobile phone market and is in competition with VimpelCom’s local unit Telecel and state-owned NetOne. - John Kachembere

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