BUSINESS REPORTER
Econet Wireless Zimbabwe targets to reduce operating expenditure by 20%
as it navigates the harsh operating environment which has seen a dip in aggregate demand across all sectors of the economy.
The move comes as the hyperinflationary environment and currency depreciation have depressed real tariffs and significantly impacted operating costs and increased foreign exchange losses.
In a special trading update, Zimbabwe’s largest mobile telecommunications,
technology, and digital solutions company said the deteriorating
environment will continue weighing down the company.
“As part of the business survival strategy, the company targets to reduce operating expenditure by 20% and made a call to our partners and
suppliers to help the company meet this target,” Econet said,
adding it anticipates that depressed demand will continue in the short term in the outlook.
“As such, cost containment and cash flow management are key focus areas for the company as we navigate this crisis. The company’s digital
transformation roadmap has been designed to ensure that we continue to provide quality service to all our customers even under these circumstances.”
Econet said voice, data, and SMS traffic declined by 5.4%,
15.6%, and 6.2% respectively compared to the comparable period last year. Voice and data services constituted over 80% of the company’s revenue base.
It said while data traffic has been increasing since the start of the national lockdown due to more people working from home, making use of digital
video conferencing channels increased e-learning activity as well as the increased social media activity, the increase was not sufficient to offset the
overall decline in real revenues caused by the lockdown as well as the declining economic fundamentals.
“The regulatory tariff increases continue to lag behind inflation and have not yet factored the full impact of the exchange rate depreciation and
hyperinflation. The company together with the other players in the industry continue to engage with the regulator to implement tariffs that will
ensure the viability of the sector as well as enable operators to
continue meeting the regulatory quality of service standards,”
Econet said.
The group said over 90% of its staff was telecommuting in April 2020 due as part of measures to contain the spread of Covid-19. The company has
adopted a phased approach to the reopening of offices with over 70% of staff still working from home.
“We expect that even after the lockdown is lifted, telecommuting will become our preferred way of doing business for those functions and
activities that can be performed remotely,” it said.
Cost containment and cash flow management have been the buzzwords for executives as they steer their firms in the tough operating environment
which has been worsened by lockdowns necessitated to contain the spread of Covid-19.
This has seen companies embarking on job and salary cuts to survive in the volatile environment which has seen a drop in revenues and the
weakening of the local currency against the greenback.
