HARARE– Zimbabwe’s biggest telecommunications firm Econet Wireless reported a 15% drop in profit to $119,4 million for the full year to February, and says new services and broadband will drive future revenue after voice earnings flatlined.
Revenue for the year was up eight percent to $752.7million, largely driven by the growth in data and Ecocash but income voice services was flat despite adding 780,000 new subscribers during the year.
The fall in voice revenue, for years the primary driver, has seen after tax profit fall from $165.7 million in 2012 to $140 million in 2013 and $119,4 million this year.
“Everyone in the country who wants service now has it. So, although we added over 780 000 new subscribers over the last 12 months, they did not help to increase revenue,” said the chief executive, Douglas Mboweni.
Zimbabwe has a mobile penetration of 103%.
Broadband revenue grew by 62% to $72,4 million while mobile money transfer service EcoCash tripled to $33,4 million. Both services contributed more than 14% of the total to offset the slowdown in the short messaging service (SMS), whose share fell to four percent from six percent.
“When you reach more than % penetration of service in any country, it means that virtually everyone now has a phone. This situation is not unique to Zimbabwe. It has happened elsewhere, and so we had long anticipated it and had begun to invest heavily in new services. We are beginning to see the fruit of that work,” Mboweni said.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Econet sees growth opportunities in smart phones, whose penetration is below 10% and mobile banking services. It controls 66%of the market, in competition with state-owned NetOne and Telecel, a local unit of Egypt’s Orascom Telecom.
The telecoms group also operates Mutare Bottling Company and Steward Bank, but their financial contribution was not highlighted.
Mboweni said Econet had paid $137,5 million to renew its operating licence for 15 years.
Only $20million of the profit will go to pay dividends and the balance will be reinvested in the business and used to pay off loans from international banks. The company is currently repaying $228 million in debts to various international banks.
– The Source
