ECONET Wireless Holdings Ltd (Econet) this week broke its own tradition of not rewarding shareholders by declaring its second dividend in five years in the interim period to December 31 2003.
The dividend of $7,30 per share came as a relief to shareholders who were now getting accustomed to the directors’ excuses of trying to “conserve cash”.
The company also marked its welcome diversion from the norm with a solid set of results that were well ahead of market expectations.
According to company financial director Tracy Mpofu the results were largely buoyed by the recent tariff hike that saw Econet increasing its charges by more than 1 500% in a space of a month.
The first tariff of 1 000% was effected in December while the 500% was introduced only a few weeks ago.
Contract services contributed 29% of revenue while the prepaid service added 71%.
“The results were pushed mainly by the tariff review that we got in December. There was also increased usage which helped us,” said Mpofu at an analysts’ briefing on Monday.
The company announced a 10% rise in the number of subscribers to 153 167, up from 139 795 during the period under review.
The numbers were further strengthened by the timely incorporation of Mascom Wireless (Botswana) into the company’s books for the period under analysis.
Econet revealed that it now wholly-owns Franchise Development and Management (Pvt) Ltd after acquiring a further 40% in the phone shop company.
The telecoms company marginally increased its stake in Transaction Processing Systems (TPS), a leading provider of point of sale devices in Zimbabwe.
Concerning the stagnant subscriber base, Econet Wireless International group chief executive officer Strive Masiyiwa, speaking through a video conferencing facility from South Africa, said the company was more concerned about the network quality.
“We will be embarking on a major network expansion programme. Until we are confident of the network we will not be taking more subscribers,” said Masiyiwa.
He said there would be a shift in the high-yielding business which, he said, was harvesting more than 200-minute airtime per user. Prepaid business harvests about 164 minutes per user.
The company is also focusing on the phone shop business.
On the Interconnect side Masiyiwa told analysts that a major agreement is set to be signed among the three cellular operators soon.
“We are working on the important issue of interconnection and plans are at an advanced stage to introduce an industrial interconnection rate,” he said.
Turning to the results, the company recorded a 760% jump in turnover to $61,9 billion, up from $7,2 billion achieved during the same period last year.