NetOne, Zimbabwe’s second-largest mobile network operator, and a state-owned enterprise needs $600 million to complete its network expansion exercise.
According to the Financial Gazette, Reward Kangai, the CEO of NetOne shared this information in an interview where he also outlined some of the growth targets for the telecoms operator.
NetOne has a revenue target of $150 million set for 2016, a projection that has likely been influenced by its growth in subscriber numbers as well as the network expansion that it has been carrying out for over year courtesy of a $218 million loan from the Chinese government.
This capital injection was directed towards a series of network service upgrades which included the setup of NetOne’s extensive LTE network as well as the installation of 148 base stations through the National Mobile Broadband Project.
The $600 million boost that’s required is supposed to provide NetOne with enough resources to continue this network rollout. The figure sounds very ambitious considering how NetOne had to go through extensive procedures to secure the $218 million.
It also seems like a bit of long shot, especially when taken it the context of NetOne no longer being the only mobile network operator under State control. Last year the government secured a controlling stake in the country’s smallest operator by subscriber numbers, Telecel.
As such, any investment in state-owned telecoms would have to consider the returns that NetOne can offer against similar investments being plowed into not just Telecel, but TelOne, another telecoms parastatal that has managed to buck the trend over the past few years and turn itself into a profitable concern with a new focus.
Hopes lie in the return to profitability?
Kangai has stated that between January and November 2015, NetOne recorded $121 million in revenue, which was a notable increase from the $110 million in total revenue recorded in 2014. During the same period, NetOne’s net profit was moored somewhere between $2 million and $3 million.
It’s a feeble number for an operator with 3,8 million active users (twice as many as its competitor Telecel) and the only subscriber base that is consistently growing.
However, it does show a claw back from a $5,8 million loss recorded in the first half of 2015. Based on these preliminary figures, NetOne is looking at brighter days ahead particularly if it can work on the slew of services that it hasn’t aggressively pushed to the market like mobile money.