ECONET Wireless has secured a US$20 million loan from the African Export-Import Bank (Afreximbank) in Cairo to enable it to expand capacity from the current 500 000 to 800 000 subscribers by the end of October this year.
matic expansion will go a long way towards alleviating the chronic shortage of cell phone lines in the country.
Network expansion for the telecommunications firm, now the biggest of the three players in terms of subscribers, has been restricted by foreign currency shortages in the country.
Announcing the development, Econet Zimbabwe CEO Douglas Mboweni said the loan was signed last week in Cairo, and has already been given full regulatory approval in Zimbabwe.
He said the foreign currency denominated loan would be serviced using Econet’s own foreign currency earnings.
Mboweni assured the market that despite the weakness in the local currency, the company’s foreign currency earnings would be sufficient to meet its loan repayment obligations as well as network maintenance.
The loan had taken several months to negotiate because Afreximbank needed to assure itself that the local company generated enough foreign currency to guarantee repayment. The additional capacity will also increase the amount of foreign currency the company actually earns, Mboweni said.
“Econet has been preparing for the expansion for quite some time and has already built more than 100 base station sites around the country which are just waiting for the imported components. This means that roll-out will be very quick, and the company hopes to have used up all the capacity by the end of the year given the pent-up demand for new lines,” Mboweni told businessdigest.
Econet has also made an order for equipment for new generation services which are currently not available in Zimbabwe.
Dismissing worries that the loan could affect Econet’s aggressive dividend policy, Mboweni said: “This development does not affect our dividend policy in any way, our cash-flows are very strong and will not be affected. The board will continue to consider the same issues it has always considered in making decisions with respect to dividends.” — Staff Writer.