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Walter Muchinguri Assistant Business Editor
The country biggest mobile services provider Econet recorded a 52 percent drop in profit after tax to $23,8 million for the half-year period ending August 31 from $49,6 million during the same period last year.

Revenue for the group also fell 17,7 percent to $323 million from $392,3 million during the same period last year. Finance costs were, however, 17,9 percent up to $21,2 million from $17,4 million.

Econet attributed the decline in revenue to the economic climate in the country and the impact of significant regulatory changes on its business.

“On January 1, 2015 the Postal and Telecommunications Regulatory Authority of Zimbabwe implemented a 35 percent reduction in regulated tariffs.

“This was in addition to the 5 percent excise duty on airtime sales which the Government introduced in October 2014 and which operators were not allowed to pass onto their customers.

“While the regulator anticipated increased usage based on reduced tariffs, the anticipated increased usage based on the reduced tariffs, the anticipated price-elasticity of consumer demand has not materialised and our revenues have clearly been adversely impacted,” it said.

Earnings before interest, tax, depreciation and amortisation (EBITDA) also fell 21 percent to $122,5 million from $155 million.

Revenue from overlay services was, however, 29 percent up to $35,5 million from $27,5 million mainly due to a turnaround in its subsidiary Steward Bank, which posted a profit after taxation of $1,9 million compared to a $3,7 million loss in the comparable period.

Basic earnings per share also declined to 1,5 cents from 3,2 cents.

In terms of operations Econet subscriber base rose by a marginal 1,8 percent to 9,18 million from 9,02 million while revenue from mobile broadband dipped 6,4 percent to $52,3 million from $55,9 million.

Going forward, Econet said that it will continue to leverage on the strength of its business model, robust infrastructure and diverse product portfolio that include Ecocash which now has a subscriber base of 4,9 million and over 21 000 registered agents, making it one of the leading mobile money service providers on the continent.