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Zimbabwe's Econet stumbles as economy falters

By , Journalist
Zimbabwe , 15 Oct 2015

Zimbabwe's Econet stumbles as economy falters

Revenue generation for Zimbabwe's Econet Wireless tumbled 17.7% for the half year period to the end of August, the company announced Wednesday, highlighting, however, that income from value added services was strengthening.

The company has mobile network, mobile money, mobile insurance and vehicle tracking services among other operations.

It has also ventured into banking after buying out former chairman Tawanda Nyambirai's controlling interest in TN Bank, which has since been rebranded as Steward Bank.

Zimbabwean mobile companies have complained of the impact that a government directive to reduce mobile voice tariffs has had on revenue generation.

Econet Wireless said revenue for the half year period declined from $323 million from the previous contrasting period's revenue position of $392.3 million.

Subscribers had nearly stagnated after rising by a smaller 1.8% margin to 9.1 million. Experts argue that the Zimbabwean mobile market has reached saturation in a country that has a population of about 13 million and includes operators such as NetOne, which has around 3 million subscribers, as well as Telecel Zimbabwe with a subscriber base of approximately 2.5 million.

"Zimbabwe is to ramp up gold production to 18 tonnes this year although platinum and chrome output is expected to be lower as mining companies in the mineral rich southern African country grapple with power outages, a worsening economy and increased revenue demands from the government," Econet said in a statement accompanying its financial report for the period under review.

After tax profits for the period tumbled from $49.6 million in the 2014 interim period to $23.8 million in the half year period to the end of August 2015. Basic earnings per share also fell from 3.2 cents in the prior year comparative period to 1.5 cents.

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