Econet revenue and broadband user numbers surge

Zimbabwean telecommunications company, Econet Wireless, recorded a 17% jump in operating revenue for its half year period ending August 2012.

By the end of the period, Econet had 2, 537 710 broadband subscribers, a 75% increase from last year’s figure of about 1, 448 000 broadband users. Subscribers of the company's mobile money offering, EcoCash, also increased to 1, 680 523 since launching last year.

The company said operating revenues amounted to $339.5 million against the previous period’s $290.9 million.

Meanwhile, earnings before interest and taxation (Ebitda), which were maintained at 45%, climbed to $152.8 million, a 16% jump on the comparable period’s income of $131.2 million.

Group chairman, Tawanda Nyambirai, said the depreciation and amortisation increased by 53.7% to $32.5 million.

“The increase in depreciation is a reflection of the significant investment made in network expansion,” he said.

“The company has invested $677 million in the last three and half years,” he added.

Nyambirai said that Econet “sustained its market leadership” position during the interim period under review.

Mobile subscribers on Econet’s network have now surged to 7.1 million by the end of that period. Nyambirai also said the expansion of the company’s 3G network led to about 116 new 3G base stations being set up.

Econet expects this to rapidly translate into increased uptake of its data services offer. Data revenues surged to 50% in the half year period.

Charles Banda, Econet’s company secretary, said that the company is also not planning on paying shareholders an interim dividend despite the company posting a 17% surge in operating revenue.

“In view of the fact that the company has already invested $19.4 million in its treasury share purchase programme for the half year period, the board of directors has not recommended an interim dividend to shareholders,” he said.

Banda explained that Econet had purchased 4.5 million shares, a development that had increased “the balance of shares held in treasury stock to nearly 11 million” shares.

However, analysts previously said increasing competition from rival mobile network operator, Telecel Zimbabwe is likely to force a decline in market share for Zimbabwe’s biggest telco.

Research and advisory firm, IH Securities, says stifled economic activity in Zimbabwe is likely to limit the growth of Average Revenue Per User (ARPUs) for Econet.

“Slowing economic growth and promotion activity on the part of competitors will also limit growth in ARPUs,” says the report.