Econet swings back to profit on the back of digital transformation

ROBIN PHIRI

Econet Wireless Zimbabwe, the country’s leading telecommunications and digital services provider, has staged a robust financial comeback, reporting a ZWG2.3 bn profit for the financial year to February 28, 2025. This marks a significant turnaround from the ZWG1.3bn loss recorded in the previous year, underlining the transformative impact of strategic reorganization, innovation, and heavy investment in digital infrastructure.

The group’s revenue surged 23% to ZWG22.2 bn, up from ZWG18.09 bn in the comparative period, as the company aggressively pursued a digital-first agenda and reorganized its core business units.

“Looking ahead, leveraging innovation and deepening AI infusion into our operations to enhance operational and cost efficiencies will position the Group to grow, diversify our product and service offering and drive revenue growth whilst protecting our margins,” Econet board chairman James Myers said.

Over the past 12 months, Econet underwent a sweeping restructuring of its Mobile Network Operator (MNO) and Financial Technology (FinTech) divisions, a move aimed at improving agility, scalability, and innovation across business units.

“This strategic transformation has yielded the intended benefits, positioning us for continued success. As we move forward, our focus remains on further consolidation and optimization, leveraging the strengths of our integrated businesses to deliver enhanced value to our stakeholders,” the company said.

The transformation included a comprehensive upgrade of Econet’s core network in the latter half of the year. The initiative bolstered the company’s capacity to deliver new, personalized services aligned with its broader digital strategy.

Econet deployed 77 new base stations, modernized 546 radio access sites, and upgraded 365 microwave access links. Notably, the group rolled out 60 5G sites nationwide in the last quarter, enhancing mobile broadband capabilities and providing high-speed connectivity to homes and businesses.

In a bid to close the digital divide, the telecoms giant also rolled out 10 lightweight, cost-effective base stations aimed at improving mobile coverage in remote rural communities.

Econet’s strong operational rebound is matched by a deepening commitment to sustainability and ESG (Environmental, Social and Governance) principles.

The company is actively investing in power resilience and environmental sustainability, including upgrades that support the national grid and the deployment of power monitoring systems at its base stations.

“We continue to invest in power upgrades, augmenting our national grid power capabilities to ensure reliable and efficient energy supply. These strategic investments enhance our operational resilience, support growing demand, and contribute to the overall stability of the national grid,” Myers said.

He added: “Our sustainability strategy focuses on meeting present needs in an equitable manner without sacrificing the needs of future generations. As we transform communities through mobile technology, empowering marginalized communities by bridging the digital divide and creating jobs, we remain aware of our environmental and social impact.”

The MNO segment saw impressive growth in both data and voice traffic, rising 36% and 23% year-on-year respectively. The expansion was supported by the company’s upgraded infrastructure and its ongoing digitization efforts, including the integration of artificial intelligence into its core operations.

“As we accelerate our digitization journey, we are adopting AI into our processes to enhance operational efficiencies and drive cost productivity,” the company noted.

Despite the increase in revenues, the MNO’s EBITDA margin softened slightly to 47%, down from 48% a year earlier.

Nevertheless, capital expenditure remained robust at 16% of revenue, reflecting ongoing network investments to meet rising demand and align with global consumption patterns.

Econet’s financial technology arm, EcoCash, also posted strong performance during the review period.

Transaction volumes grew by 21%, while transaction values skyrocketed by 210%, driven by higher customer activity and wallet funding.

EcoCash has been intensifying efforts to increase cash-in transactions and bolster international remittance flows—two pillars crucial for its strategic vision of becoming a globally integrated mobile payments platform.

“Efforts to onboard more payment partners are ongoing, as the business aims to establish a global payment platform that prioritizes convenience and value for customers,” the company said.

Myers reiterated the Group’s long-term strategy will remain rooted in leveraging digital innovation and enhancing customer experiences through AI and emerging technologies.

“The Group will continue to make investments in digital transformation, embracing new technologies and actively pursuing strategic opportunities to enhance and complement our product portfolio. By harnessing the power of AI, we aim to create seamless experiences for our customers across all business segments,” he said.

With a resurgent bottom line, strategic investments in future-ready infrastructure, and a bold AI-driven transformation roadmap, Econet appears well-positioned to not only maintain its market dominance but also redefine the digital and financial technology landscape in Zimbabwe and beyond.