Econet Wireless, Zimbabwe’s largest mobile network operator announced its interim results for the six months ending August 2015, with the telecoms operator registering a 17.7% drop in revenue compared to the same period last year.
In the 6 months leading to August, $323 million was realised in revenue, down from $392.3 million for the same period last year. Mobile Broadband revenue retracted by 6.4% to $52.3 million, with overlay services revenue gaining by 29.1% to $35.5 million.
Profit for the period stood at $23,8 million which represents a 52% drop from the $49,8 million recorded in the same period last year.
Earnings before Interest, Depreciation Tax and Amortisation (EBIDTA) dropped by 21% to $122.5 million, though Econet has taken solace in the fact that its EBIDTA margin of 38% is comparable to other telecoms operators in the region.
In a statement from the Econet CEO, Douglas Mboweni, some of the hindrances to a better performance included the challenging operating environment which has been plagued by deflation and problems involving job terminations, regulatory stumbling blocks like the reduced tariffs on voice communication and added tax burdens such as the 25% duty on mobile devices introduced by Government last year.
Econet’s CFO, Roy Chimanikire referenced the aggressive cost rationalisation programme, touching on both operational and capital expenses, that the company had put in place to help improve its earnings.
So far this has included salary cuts for its employees, a series of retrenchments, as well as reaching out to suppliers and asking them to reduce their prices.
As had been anticipated, Econet’s statement leaned heavily on the bet it is making on the possibilities that lie ahead for the telecoms operator as it becomes a provider of overlay services, something that Econet shaded in the background with its ongoing “Beyond The Phone Expo“ which highlighted some of these new revenue streams.
As such, a lot of emphasis has been placed on the success and potential of products coming out of the Econet Services division which include EcoCash as well as other up and coming industry disruptors like EcoSure, EcoFarmer, EcoHealth and the Connected Services brand which handles entry level IoT products for cars and homes.
You can find the complete results on the Econet Website