EcoCash reports 76% growth

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ECONET Wireless (Econet) says its future growth will be driven by non-voice revenues after reporting a 76% growth in subscribers for its mobile money transfer service EcoCash which has handled more than US$2 billion on its platform since inception in August 2011.

Taurai Mangudhla

Chief executive Douglas Mboweni this week said at the mobile operator’s half- year results briefing for the period to August 2013, EcoCash had handled more than US$1,2 billion in the last six months alone in more than 50 million separate transactions and growth was expected as new features were introduced.

EcoCash now has more than 700 000 agents dotted across the national grid, making it the most accessible money transfer service.

This comes after the company recently said its share value and future growth would be driven by overlay services as opposed to the traditional voice and short message services (sms).

“We believe innovation is the way to go, what you have seen with EcoCash, Ecosave, Ecofarmer, you will see more of it. We recently did a pilot project for remittances from Johannesburg to Harare and there is tremendous demand for that product,” Mboweni said at the interim results briefing.

“Revenue growth based on voice is no longer as dramatic; it’s actually slowing, which means you have to be innovative.”
He said a savings account, Ecosave, which was introduced two weeks ago, has received tremendous uptake on the market with more than 500 000 accounts having been opened since it was launched.

“Just in the past two weeks, Ecosave has propelled Steward Bank to being the largest bank in Zimbabwe in terms of account holders, with over 500 000 new accounts opened,” Mboweni said but he could not be drawn into giving the value of deposits under the Ecosave platform.

“What we have done is to say for as long as you are an EcoCash subscriber, you can open an account and yes, initially it was with Steward Bank but we have now invited all the other banks to come on board,” said the Econet CEO. Voice revenue increased by 19% in the half-year compared to last year, while data grew 43%, with 3,8 million users compared to 2,5 million in the first half of 2012.

Mboweni said the future would see 4th generation (4g) internet taking over 3rd generation (3g) internet, introducing internet speed of up to 10 times faster. A digital Econet store is also on the cards, were local content will be sold. The content is created by partners who will split the profits with Econet.

In terms of financial performance for the half year, Econet group chief finance officer Roy Chimanikire said the group reported an after tax profit of US$70,6 million, 10% down for the first half of 2012, despite an increase in revenues to US$376, 6 million compared to US$339 million.

Chimanikire said interest charges went up 75% after a multi-lender facility which was finalised three months into the preceding financial year.

Econet subscribers grew by 22% to 8, 5 million compared to prior period while network investment also increased by 35% to US$85, 4 million. Most of the funds were channelled towards development of new products.

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