Business Reporter
ECONET Wireless Zimbabwe is on the verge of concluding talks with a group of unnamed international banks for a US$307 million syndicated loan facility to finance capital projects.

Company executives told an analysts’ briefing on Tuesday that the company was in the final stages of negotiations and would make an announcement in a few weeks’ time.
Chief executive Mr Douglas Mboweni said most of the funds would be spent on network expansion and capacity upgrades to maintain a stranglehold of the mobile phone market.
With about 70 percent of the market, Econet Wireless is Zimbabwe’s biggest mobile phone operator. It has seen subscribers increase from 1,2 million in 2009 to 6,4 million last year.
Funding from the banks would also go towards expansion of data services and introduction of innovative products to create more value, improve service quality and increase revenue.
Having sunk a whopping US$614 million over the last four years, Econet contends the foundation is now firmly in place. What  remained was expansion and driving usage of services.
Mr Mboweni would not disclose the finer details on the terms of the loan — such as its tenure and the cost at which it would be extended.
But finance director Mr Kris Chirairo said the loan includes facilities which have already been extended to Econet for which the company is bargaining for more relaxed terms.
“We are negotiating for a US$307 million syndicated loan facility (from international banks),” he said. “We are working to meet the terms and conditions of the loan. Until we have secured the loan, we thought it would be prudent not to pay a final dividend (for 2012).”

Econet has paid a US$54 million dividend, cumulatively, since dollarisation. Last year, the company declared an interim dividend of US$20 million, including a dividend in specie for Meikles and Kingdom shares.
Mr Mboweni said with mobile penetration at 74 percent there were huge opportunities in attaining optimum penetration, hence the need to invest capacity expansion to extend coverage.

“The next phase is to become more innovative and creating products that have relevance to the subscribers,” he said.
Six months ago, Econet introduced EcoCash, which allows subscribers to send and receive money anywhere in the country.
The facility has seen tremendous growth since its introduction, with registered subscribers reaching over a million.

But Mr Mboweni said future expansion would be funded from internal resources. The firm paid US$10 million in finance costs during the financial period ended February 29, 2012.

But this was a drop in the ocean, considering the 24 percent growth in revenue to US$611 million, enabling the company to register a 17 percent increase in after-tax profit to US$165 million.
Voice calls accounted for the biggest chunk of the revenue inflows, increasing from 66 percent in 2011 to 68 percent this year. Data services contributed 13 percent to group revenues.

Mr Chirairo attributed revenue growth to increased subscribers and growth in usage of the telecom and data services.
The massive investment in network expansion saw the value of assets increasing 27 percent on prior year to US$812 million.