Africa Moyo Business Reporter
NETONE, the country’s second-largest mobile telecommunications operator, reported revenues for the year ending December 31, 2016 rose the most in five years to $115 million, from $114 million a year earlier as its bundled package, OneFusion, spurred growth.
Losses, however, widened to $2,7 million from $2,6 million a year ago weighed by high operating costs and legacy debts. When compared to 2011, the losses have narrowed to $7,72 million.
Gross profit — which measures a company’s top line, less the costs associated with providing the service — however rose to $83 million from $77 million in the review period.
NetOne is spending more than $400 000 per month on diesel for power stations, some of which are not on the grid.
Interest on legacy debts and repayment on loans to China Eximbank, penalties and depreciation of capital equipment is also heavily weighing on its balance sheet.
The State-owned enterprise is also laden with statutory fines from the Zimbabwe Revenue Authority (Zimra) and the State Procurement Board (SPB).
Chief executive officer Mr Brian Mutandiro indicated last week that NetOne is the only mobile operator to register revenue growth last year. “Notably, all the other operators recorded revenue decline of varying magnitudes, according to Potraz’s report of 2016,” he said.
“This revenue performance was a direct result of a number of initiatives put in place by management to drive business growth, mainly the offering of customer-centric products, broadening the product and service offering and realigning of existing products whilst driving subscriber acquisition.”
The local telecommunications sector recorded an overall 21 percent revenue decline to $1,1 billion last year from US$1,4 billion in 2015. Over-the-top (OTT) platforms such as WhatsApp and Twitter are chewing into revenues for the sector.
But NetOne’s bundled bouquet, which includes social media, voice and SMS packages, managed to attract many subscribers. Last year, the operator gained 600 000 additional subscribers.
Conversely, its competitors Telecel and Econet Wireless Zimbabwe lost 100 000 and 300 000 subscribers, respectively. NetOne plans to leverage on its growing subscriber base and product portfolio, buoyed by the $218 million investment into network expansion.
Mr Mutandiro said: “We are ready to seize opportunities to expand our business as the fastest growing mobile network operator in Zimbabwe.” It is believed plans are underway new and innovative services such as in mobile financial services and managing the business in a cost effective way.