Zimpapers Logo

State owned mobile phone services provider, NetOne posted an after tax loss of $6 million in the first half, down from an $8.5 million profit in the same period last year. In a statement, the company said profitability was weighed down by investments in expansion projects. In a first for the parastatal, NetOne publicly released its half-year financials in line with Government’s National Code on Corporate Governance, according to new NetOne chairman, Mr Alex Marufu.

In the period, the telecoms company revenue surged 14 percent to $57,8 million, although Mr Marufu said its growth was constricted by the introduction of a 5 percent excise duty on telecoms products and customs duty on all mobile devices as well as a 35 percent tariff reduction effected in January.

“The company reported a net loss of $5,8 million weighed down by a substantial investment in additional spectrum required to make the commitment in Zim Asset to provide ubiquitous internet connectivity a reality,” Mr Marufu said.

Zim-Asset is the Zimbabwean Government’s five-year economic blueprint running from 2013 to 2018. In the period January to June, NetOne’s capital investment amounted to $5,59 million. Mr Marufu said profitability remained a key objective for the business, which entailed implementation of “hawked-eyed” focus on cost containment as well as innovation to drive the business.

“Sustainability of the business will come from ruthless pursuit of innovation in all areas that matter to the people of Zimbabwe, be it in transport, farming education or manufacturing,” he said.

Mr Marufu said the company’s new board, appointed this year, was currently spearheading an overhaul of the company’s management team to get the parastatal back to profitability. He said NetOne had since dollarisation in 2009, invested over $214 million in network expansion and has rolled out shops across the country to improve its reach to subscribers.

The state-owned firm is currently implementing a $218 million Chinese funded network expansion project to improve its internet connectivity. Mr Marufu said NetOne had in the last six months registered a massive growth in its data services, which is expected to continue growing and become a key revenue source for the telecommunication company. He said power shortages the country was experiencing presented a double challenge for the firm as it meant investment in generators which are expensive to run.

NetOne is Zimbabwe’s second largest mobile firm with an active subscriber base of 3,1 million. – New Ziana.