Zimbabwe state owned fixed phone operator TelOne is seeking to rationalise its cost base through negotiating a reduction in internet landing rates as well as reducing its fuel and staff costs.

TelOne last week reported a $480 000 net profit for the year to the end of June, swinging up from a $7.8 million loss in the previous contrasting period.

The company experienced the profit jump despite a slump in revenues for the period, from $76 million to $69 million attributed on tough economic conditions that are forcing subscribers to spend less on communication.

Now, managing director Chipo Mutasa is seeking to grow the revenue base by significantly reducing the company's cost base. TelOne has already instituted a 15% salary cut for its employees and moved to place those above 45 years of age on a voluntary retrenchment.

"Staff costs are not the only cost that we are looking at. We are looking at cost containment across the business," Mutasa said.

She added that there were "so many other costs" that needed to be reduced, including internet connectivity as well as fuel costs - specifically during periods of power outages.

"We are looking at internet protocol charges; we are engaging our cross connect partners to reduce those costs so that we can possibly reduce our internet landing price and so that we can have a better margin."

Zimbabwe is currently grappling with worsening power outages. Executives in the country's telecoms industry say fuel costs incurred in running generators to cover for power shortages are the second largest running cost driver after staff costs.

Mutasa said: "If you can't control your revenue line, you have to start looking at your costs."

Other operators in the Zimbabwean telecoms industry have already implemented cost reduction programs.