Econet ventures into gas

HARARE - Telecomms group Econet Wireless Zimbabwe (Econet) plans to venture into the gas business, Business Live has established.

This comes as most Zimbabweans are enduring massive power cuts, extending as long as 18 hours a day, making the alternative energy business lucrative.

While Econet’s corporate communications manager Ranga Mberi neither confirmed nor denied the plans to venture into the lighting, cooking and heating gas project, sources told Business Live that the group intends to unveil the plan early in December.

“Econet Wireless has and continues to explore business opportunities that complement its growth strategy and these will be announced if and when there are material developments to report,” Mberi said, without disclosing further detail on how much they are investing into the venture.

The group — Zimbabwe’s largest wireless network operator with about 9,5 million subscribers — already has interests in the energy industry through Econet Solar.

Under Econet Solar, the telecoms giant targets to expand its investment in renewable energy.

Recently, the group, which owns Steward Bank, diversified into health insurance after acquiring TN Medical —renamed to Steward Health..

It has also ventured into car tracking.

Meanwhile, Econet recorded revenue of $392, 3 million in the half year to August 2014, up four percent from prior comparable period. During the period under review, after tax profit slumped 30 percent to $49,6 million from $70,5 million realised in same period last year.

The telecoms group said the depressed performance was on the back of subdued economic activity.

“Although revenue growth has slowed, this is in a context of declining revenues in most other industry sectors in the economy and lower economic growth,” it said.

Earnings before interest, taxation, depreciation and amortisation (Ebitda) margin stood at 40 percent compared to 45 percent in the previous year.

Net cash generated from operations declined to $116, 95 million from $186,3 million due to declining consumer spend.

“Capital expenses such as depreciation and amortisation increased by 32 percent to $60,4 million in line with the growth of the asset base and as a result of the amortisation of the licence renewal fee of $ 137,5 million,” the company said.

Douglas Mboweni, Econet chief executive, added that the company’s strategy to steer the business towards value added services was beginning to bear fruit, as overlay services indicated strong growth.

Apart from voice services, he said products such as EcoCash, data services and others, contributed 21 percent to group revenues, up from below 10 percent.

Cumulatively, the contribution of these products to Econet’s revenue has grown by 96 percent since the company began implementing the strategy.

“We had anticipated the trend away from traditional income streams. We then took a strategic decision to steer the business towards innovations that would become new sources of growth for our business.

We are beginning to see the fruits of that strategy,” said Mboweni.

He however added that voice services would remain a critical service offering and would continue to receive the appropriate attention.

“New investment is being committed to improve quality of service and customer care,” he added.


Comments (8)

If we could have another 10 people like him in this country, then the cry to have the whites back would not be necessary, even the chinese. The administration of the day needs to understand and trust local entrepreneurs and provide the necessary operating environment in order to fully exploit the unparalleled potential inherent in the local populace. They need to adopt an attitude allowing for the emergence and continued existence of genuine business people than to hound them out in favour of aliens who just replace the oppressors we kicked out. Who knows, we could achieve the feat achieved by the Japanese after the Pearl harbor fiasco, rising from the ashes, the phoenix way. This man has to be hailed for providing much needed jobs and services down stream, even though at times the service sucks.

badass - 13 November 2014

Nay he is a monopolist.Will send you to jail if you dare get into his line o business.Ask the Indian guy who was recently arrested trying to bring in voice traffic from SA.And also what happened to people 's Ecolife subs ?

Tino - 14 November 2014

Zimbabwe needs more artisan type training in its education to produce graduates that can make things with their hands. We need more investment in vocational type education and in agriculture which is the mainstay of our economy. Over the past decade or so there has been a lot of focus on degrees, building degree-awarding institutions and acquiring MBAs. Our needs are very basic in this simple economy, we need the basic artisan skills to manufacture basic goods. We are short on basics. Zimbabwean education is difficult to a level where it fails people that could be quite useful in various career options. I think it's time they split up some subjects like Maths so that. students are able to choose the type of Maths that suits the careers they want to pursue. Some of the Maths is too difficult and students that are quite capable in other areas end up failing. Our curriculum must set-up the students to be useful after 11/13 years of education. Not all careers require knowledge of those challenging quadratic equations – I am sure Nurses for example do not need that level of Maths. We could set-up the different areas of Maths to have a separate grade on the certificate. We could have Commercial Maths for example that just prepares students for a life where they are able to function in basic trading transactions. We could have applied Maths that prepares people for artisan trades where they may be required to know some geometry and stuff like that. Then we could have the Advanced Maths option for students who want to pursue careers in Engineering, Sciences etc. I think creating the various modules of Maths to be graded separately is a practical thing that we need to do now

Elements Nhangande - 15 November 2014

I agree with you brother badaas.We need only few Zimbabweans like our revered hero Strive Masiyiwa to have our country on world record and going.Look just at the immesurable contribution he gives his country,how many people are employed by Econet,Steward bank,Steward Health,Eco Solar and now he wants to venture into gas.May the Lord bless you son of the soil your are our living hero.Whilst others are busy looting investing out of the country,others showing off with what they possess even getting their wealth via illegal means or immorally.Strive Masiyiwa has always stood for noble causes having top priority betterment of the welfare of his fellow compatriots in need.You have great responsibility with your Zimbabwean family first and foremost and then your second family which is your wife ,children and your relatives.Your responsibility is hefty so the Lord shall not abandon you.

CARSON MACATE - 16 November 2014

Indeed the man has to be lauded for the contribution he has made to the economy. In every business there are always hic ups service delivery etc. I really dont see why we need to keep selling our economy to the east or west non of them are our saviours they can G.H.

VCZ - 16 November 2014

Econet kwakuseri

Mudu - 19 November 2014

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