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Zim's Telerix restructures to manage costs

By , Journalist
Zimbabwe , 01 May 2015

Zim's Telerix restructures to manage costs

Zimbabwean wholesale and retail internet services company, Telerix Communications, is to be restructured to allow for cost cutting measures, its London listed parent company, Masawara, said on Thursday.

Telerix Communications operates in Zimbabwe as Dandemutande where it offers retail broadband internet services under the uMax brand. It also provides wholesale broadband internet under the Utande brand.

Despite commanding a significant presence in the Zimbabwean wholesale and retail internet provision sector and registering a 16% growth in revenues in 2014, Telerix posted an Ebitda loss of $1.2 million for the 2014 full year.

"Although Telerix has continued to register growth in revenues, these have not reached a sufficient scale for the business to be profitable and cash positive. Initiatives are currently underway both to rationalise the cost structure and achieve scale," said Masawara.

Gross margins for the period increased from 22% to 31% during the year while operating costs decreased by 16%.

The company holds an Internet Access Provider (IAP) Class A telecommunications licence awarded by the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz).

The licence allows it to construct, operate, develop, extend, and maintain a public data and internet access network, and to offer Voice over Internet Protocol (VoIP) services, according to its website.

Telerix Communications has a standing 20 year agreement with SEACOM to provide broadband internet across Zimbabwe.

Masawara said it had turned the corner for the better after raising profits before tax to $16 million from a $10 million loss in 2013.

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