HomeBusiness DigestEconet subscriber base grows 20%

Econet subscriber base grows 20%

Conrad Dube

TELECOMMUNICATIONS concern Econet Wireless has for the first time in four years reported a 20% subscriber growth to 173 604 during the year to June 30.

a, Arial, Helvetica, sans-serif”>Sales of new lines are continuing and supply of the company’s popular Buddie lines could be available on demand by the end of the year.

The company has stepped up investment in network expansion as well as the introduction of new services.

“Although our roll-out of base stations is still lagging behind, capacity of the switching system has been expanded to 400 000 subscribers and with base stations being rolled out we expect to double the subscriber base within 18 months if we continue to access foreign currency from the Reserve Bank’s auction system,” said Econet boss, Douglas Mboweni.

In terms of financial performance Econet reported a commendable set of results in which it outpaced the hyperinflationary environment in all key areas.

Revenue grew by 32% to $305 billion in inflation-adjusted terms.

Operating profit was up by 77% to $115 billion.

Profit before tax was up 78%, boosted by the first dividend contribution from Mascom Wireless, the Botswana operation in which Econet has a 14% stake.

Attributable profit increased by 167 % to $ 53 billion.

Analysts say the company’s margin of 51% was in line with other mobile phone operators in the region.

Its Average Revenue Per User (Arpu), a performance indicator keenly followed by the cellular industry, has also recovered to US$19,60 per subscriber after having fallen to US$5,44 in June last year.

“Whilst this is still below most operators in the region including countries like Zambia, it is clear that the industry regulator has moved to restore viability to the whole telecommunications industry in Zimbabwe by allowing tariff adjustments which make it possible for them to replace ageing equipment and also carry out modest expansion,” said Mboweni.

The company has invested heavily in pay phones to take advantage of the growth of the informal sector in which many people are increasingly self-employed rather than working in established businesses.

Econet estimates that more than 400 000 customers who are using its payphones and phone shops per month are bringing in excess of $2 billion in revenue.

Econet has an ambitious programme to have more than a million people using its public payphone services by the end of the next financial year.

Apart from the re-introduction of Buddie, the pre-paid service, the company has invested a lot of money in Libertie, a post-paid contract line which allows corporates to control the airtime budget for their employees.

Econet, which only began to pay dividends last June, has announced a dividend of $8,58 per share, which gives a consolidated dividend position of $15,93 per share for the year.

Econet Wireless this month resumed full interantional roaming for all its customers after the waiver by the Reserve Bank of Zimbabwe (RBZ) on roaming services.

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