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Business Reporter
ECONET Wireless Zimbabwe says it will focus more on exploring new innovative services that offer added convenience and value to customers to boost revenue, earnings and ensure sustainable business growth.
This comes as after-tax profit declined to US$71 from US$78 million in the interim to August 2013 despite total revenue increasing by 11 percent to US$376 million due to notable growth in data and overlay services.

Group chief executive Mr Douglas Mboweni told journalists during presentation of the firm’s half-year results to August that Econet has been experiencing a decline in voice revenue inflows despite growth in subscriber numbers. Traditional revenue inflows are declining due to maturity.

While Econet added more than 500 000 new customers to 8,5 million over the interim, Mr Mboweni noted that voice revenue has continued falling.

As such, the mobile telecommunications firm will now put emphasis on innovative products under overlay services cluster to sustain growth of the business.

The company had already been experiencing exponential growth in the area of data services, but with voice services revenue in decline Econet said it will now ride on its massive infrastructure to roll out many value added services.

“Traditional voice service has been seeing slowed growth, even when we have been adding new subscribers . . .revenue growth is no longer as dramatic as it used to be and we have to find new revenue streams,” he said.

“The future of this business lies in innovative solutions. Going into the future it’s going to be about innovation to sweat the assets (of the company) to complement the revenue that we are getting from voice,” Mr Mboweni said.

He said while data is expected to grow exponentially overlay services are expected to make a significant contribution to the business going into the future.

With a robust telecommunications infrastructure on the back of about US$1 billion investment since inception, Econet says it has seen huge growth in data services and new services such as EcoCash, EcoFarmer and EcoSave.

EcoCash is a mobile money transfer service; EcoFarmer is mobile phone-based crop insurance cover while EcoSave is mobile phone savings account.

Econet said the contribution of non-traditional services to revenue increased from 5 percent to 10 percent during the period under review with EcoCash alone handling a total of US$1,2 billion transactions during the period.

Overall, Econet said profitability declined despite an 11 percent revenue jump due to a 75 percent increase in finance charges resulting from US$307 million syndicated loan the firm received in 2011 for network expansion.

The US$18,2 million finance charges for the interim are expected to decline significantly going forward with deputy finance director Mr Roy Chimanikire saying the loan has been whittled down to just over US$200 million.

Econet did not declare a dividend after the firm financed from its balance sheet US$137,5 million for renewal of its new 20-year licence.
Earnings per share dropped marginally from US4,5c in August 2012 to US4,5 in August 2013 while assets increased to US$1,1 billion from US$875 million.