Econet back in the black

LIVINGSTONE MARUFU

Econet Wireless has swung back into profit of ZWL$6.5bn for the half year ended August 31 2021 from a loss of ZWL$127.6m during the same period last year on the back of an increase in revenue and cost containment measures.

In a statement accompanying results, Econet chairman, James Myers said the digital company remained focused on furthering the digital transformation of its products and services as it transforms to a fully-fledged digital services provider.

“In the period under review, revenue increased by 95% to ZWL$29.6bn, anchored by the increased contribution of data services. Data revenue grew by 136% and our voice services revenue increased by 92%.

“Aggressive cost management resulted in earnings before interest, taxation, depreciation and amortisation margin improving to 55% from 47% in the comparative period,” Myers said.

Econet exchange losses arising from foreign currency denominated obligations decreased to ZWL$481m from ZWL$ 15.2bn and these  losses arose because of the movements in the exchange rate on the foreign currency auction system and the consequent impact on the value of foreign currency liabilities, as expressed in the reporting currency.

Myers said capital investments remained severely constrained at 3% of revenue against an industry benchmark of between 10% and 15% of revenue, on account of foreign currency unavailability.

Econet requires its infrastructure to continuously improve in order to continue to provide a service at the quality and scale demanded by its customers but this has not been possible in the current environment, due to the unavailability of foreign currency.

Myers said following the offer made by the company for the early redemption of debentures, at the interbank rate, 22.46% debentures were offered for early redemption by the holders.

The company remains with an obligation for 904 778 710 debentures which are due for redemption in April 2023. Half of the debenture liability is due from Cassava Smartech Zimbabwe Limited.

Econet is also investing into artificial intelligence, machine learning and gamification as it seeks to better understand our customers’ needs and expectations.

“Our efforts in pioneering innovative digital products, in addition to providing an unparalleled customer experience continue to drive our performance thereby helping us to retain our market leadership.

“We have made meaningful strides in our digital transformation journey. The journey requires us to scale-up our already robust digital infrastructure and continuously enhance our staff capabilities so that our customers are able to experience the digital world in a more intimate way,” Myers said.

In September 2021, the telecommunications regulator approved a cost-based tariff adjustment, for operators, based on the telecommunications price index for voice, data, SMS and USSD; and fixed data services respectively.

During the period under review, Econet upgraded its 4G network in Harare and Chitungwiza and this increased the data browsing speeds by 1.5 times, reflecting its commitment to improve customer experience.

Econet commissioned 18 new base station sites across the country to provide network connectivity in new suburbs that were previously un-serviced.

It plans to commission over 215 new LTE sites country-wide to improve network quality and availability.

“In the next few months, we will start our 5G journey as we pivot to the next stage of our digital evolution. An improved know your customer platform that meets modern technological features such as biometric identification is under consideration. This will enhance compliance with subscriber registration legislation whilst safeguarding customers from identity fraud,” Myers said.