Zimpapers Logo

Michael Tome–Business Reporter

NetOne says data revenue, at $8,2 billion, dominated its revenue mix in the 2021 financial year driven by improved subscription to the network and continued reliance on data as sizeable proportion of the workforce State owned mobile operator’s continued to work from home.

The data revenue represented 44 percent of total income.The data revenue contribution of Internet & data service to the the topline of mobile telecommunications has been consistently increasing as demand is consistently rising, especially due to restrictions caused by Covid-19 but also growing use and number of over the top services.

At $7, 8 billion voice revenue was the second in terms of revenue contributing, accounting for 42 percent of the total, representing 37 percent growth on the 2020 performance, driven by voice airtime promotions and tariff increases according to NetOne.

On the other hand roaming and foreign interconnection contributed eight percent to total revenue at $1,4 billion, down from prior year’s $1,1 billion attributable to the pandemic which saw international businesses grinding to a halt for the greater part of the year.

During the year under review, NetOne’s subscriber market share grew significantly to 31,4 percent from 28 percent in 2020 as active subscribers closed the year at 4 470 592 translating to net growth of 779 278 subscribers in a single year from  2020 closing base of 3 691 314.

This saw annual revenue growth of 95 percent to $18,6 billion in inflation-adjusted terms from 2020‘s $9,4 billion.The surge was seen in an environment where average monthly inflation prevailed at 143 percent which was below the annual revenue growth rate (inflation-adjusted).

In terms of foreign currency earnings, NetOne managed to earn US$8,3 million revenue in the 2021 financial year.

A total of US$6,3 million was earned in the first half of 2021, before the introduction of SI 127 in June, the introduction of the SI eased forex earnings by circa 50 percent.

“The revenue growth was not entirely inflationary, but organic growth attributed to the 21 percent growth in subscribers, also data bundle tariff price upwards reviews in March, September, October, and November maintained the revenue growth throughout the period.

“This led data revenue to contribute 44 percent while voice revenue was on an upward trend driven by voice airtime promotions and tariff increase,” said NetOne chief executive officer Mr Raphael Mushanawani in his remarks at the NetOne sixth annual general meeting.

In the year, capital expenditure stood at $809 million, mainly driven by the National Mobile Broadband (NMBB) phase three network expansion project.

NetOne board chairperson, Susan Mutangadura said the business benefited from its designation as an essential service during the Covid-19 induced lockdowns, as well as increased product demand.

“During the period under review, the company witnessed growth in revenues and customers who subscribed to NetOne Mobile Financial Services (MFS). Concerted efforts by the business to drive the digital transformation strategy led to significant data contribution to the total revenue in 2021,” said Ms Mutangadura.

However, the company indicated that it continued to face challenges accessing foreign currency, given that the substantial part of operating costs for a mobile telecommunications company is paid in US dollars.

The situation was compounded by power challenges experienced during the year which required the business to consider alternative sources of power with significant reliance on diesel generators whose fuel to power base stations was procured in US dollars.

NetOne, however, lauded the Government for establishing foreign exchange auction market which according to the company enabled the business to acquire the necessary foreign currency to pay vendors for the supply of equipment, maintenance and support service fees.

NetOne acting Chief Finance Officer, Timothy Hama indicated that operating costs to revenue percentage decreased to 34 percent in the year to December 2021from 46 percent in 2020.

“Overheads grew by 46 percent with the major cost drivers being network, staff, and marketing costs, while foreign loans continue to weigh the company’s balance sheet,” he said.

The company said it continues to lobby for the allocation of more foreign currency required for the business to meet its foreign obligations and for the delivery of the latest technology to enable the business to offer customers world-class services.