The company, which today announced its financial results for the year ended 29 February 2016, said the decision to invest in infrastructure will pay in the longer-term as consumers opt for data services. In addition, Econet’s continued innovation through such platforms as the EcoCash mobile money service is laying the foundation for future growth in revenues and market share, says Douglas Mboweni, the CEO.
Mr Mboweni said the company’s resilience through continued investment in infrastructure and introduction of innovative products was also key to surviving and growing in what is increasingly becoming a volatile and complex economic environment. The company is also focusing on cost optimization to protect revenues, he said.
Mr Mboweni said the decline in voice and SMS revenue is now a global trend which Econet had long anticipated.
“The local telecom industry in line with global trends is experiencing a decline in voice revenues. We long saw this trend and over the years we have invested in our infrastructure and created an innovation pipeline to create new revenue streams. In a shrinking industry we have maintained market dominance getting 70% of the value share while aggressively growing our broadband and mobile financial services. Through our robust business model we are overcoming disruptive technology cycles and strong economic headwinds,” he said.
“The declining voice revenues will be eased by incentives and packages that suit declining disposable incomes and growing our broadband through wider 4G/ LTE coverage, offering affordable smartphones and rolling broadband to the home. Our focus will also be on growing mobile financial services through promoting EcoCash as a premier mobile merchant payment platform and broadening our mobile insurance offering. The entry of the groundbreaking media service, Kwese TV will enable us to offer media and entertainment services for our clients creating further headroom for value,” he said.
Revenue in the period was $641.0 million, which is 14.1% down from the same period last year’s of $746.2 million. Profit after tax was US$40.2 million impacted by high depreciation amounting to US$ 136.8 million. EBIDTA was $238.4 million down from $285.6 million which was 16.5%.
He said EcoCash has become the largest mobile banking and money transfer service in Zimbabwe, and one of the largest in the region. As of year-end, EcoCash had 5.8 million registered users and had moved USD6.6 billion through money transfer, both within Zimbabwe and from Zimbabweans remitting money from outside the country.
Other services such as EcoSure and EcoFarmer had also registered growth during the period under review. For example, he said EcoSure has covered over 1 million lives during the course of this year while EcoFarmer now had 900 000 clients. “We see great potential in these two services and we have exciting plans for them in the coming months,” said Mr Mboweni.
Commenting on the financials Finance Director, Mr Roy Chimanikire said, “These results reflect the impact of the regulatory tariff reductions as well as a cocktail of taxes and levies which include 5% excise duty and the increase in USF levy. This has effectively reduced our tariffs while directly increasing our costs through additional tax burden. Through an aggressive cost optimization programme we are ensuring that we protect the bottom line”
The company recorded subscriber growth of 9% from 9.2 million last year to the current 10 million. This growth was in spite of the over 1 million subscribers who were deregistered in compliance with regulatory requirements for proper registration. The revenue lost from the deregistered subscribers amounted to US$ 2 million and the cost to reconnect these subscribers
Techunzipped