Econet revenue up 14pc

HARARE - Econet Wireless Zimbabwe Limited (Econet), the country's largest wireless network operator, registered $695 million turnover in the year to February 2013, up 14 percent from $611 million recorded in prior comparable period.

However, the telecommunications group's profit after tax went down 16 percent to $139 million during the period under review.

It attributed the depressed performance to escalating operating costs.

The operating expenses were driven up mainly by ballooning interest charges on a syndicated $307 million loan and maintenance of backup electricity generators for base stations.

“Finance charges increased due to finalisation of the multi-creditor facilities in the year under review,” said Econet’s chief executive Douglas Mboweni.

Mboweni said there was a slowdown in voice calls revenue despite the company’s subscriber base growing by 25 percent to eight million after it invested $147 million to upgrade the network.

“Certainly voice is still a key segment but this means that our initiatives in the non-voice category (data and overlays) simply have to be robust and solid in order to deal with the slowdown,” said Mboweni.

Earnings before interest, taxation, depreciation and amortisation recorded a margin of 44 percent to $305 million from $291 in prior year while depreciation and amortisation increased by 54 percent to $71,6 million in line with the growth of the asset base.

Total assets surpassed the $1 billion mark, registering a growth of 25 percent from last year while the company’s debt to equity ratio improved to 54 percent from 65 percent in the period under review.

Mboweni said the group’s mobile money transfer business, Ecocash, handled over $1,2 billion worth of transactions since its inception two years ago.

“An analysis that we have done shows that 33 percent of this value is in the last three months. What it reflects is that the growth in Ecocash is not a linear line growth but an exponential one,” said Mboweni adding that the integration with banks is bringing in more flexibility.

The number of customers for Econet’s mobile money transfer service increased by 62 percent to 2,1 million while over 55 million transactions have gone through EcoCash.

Econet took control of a TN Bank last December to strengthen the mobile money transfer service and has to date intergrated 10 banks with Ecocash.

Data subscribers increased by 52 percent from 2,1 million to 3,2 million in the year under review buoyed by popularity gained due to high speed, excellent quality and the most extensive coverage of any operator in Zimbabwe.

Mboweni said government renewed Econet’s licence, which expires in July and Econet has already paid the first instalment of $85 million.

This comes as government set 20-year licence fees for the country’s three mobile telephony firms at $137,5 million.

“It gives us a clear focus on what needs to be done with the licence now behind us,” said Mboweni.

Going forward, Mboweni said the group will research and work on innovations in services that address the needs in the financial services, farming, health and education sectors.

“Having made significant investment in network capacity and coverage in the past few years the company will continue to focus on improving its customer service platforms, distribution network and further enhance its Internet service delivery capabilities,” said Mboweni.

Despite Finance minister Tendai Biti saying the country’s economy may have shrunk by as much as three percent during the first quarter, the telecommunications industry is one of the fastest growing sectors in the Zimbabwe. - Kudzai Chawafambira

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