Today, Econet Wireless Zimbabwe, the company that has the lion’s share of the mobile telephony & broadband business in Zimbabwe, announced at a press briefing their annual financial results the period ending February 2013.
The results are not the usual super impressive goodness the company has been posting in recent years. Profits after tax are down 15.6% from $165,741,088 in 2012 to now $139,938,220. Though the total revenues increased, the rate of increase this year, 13.7%, is much lower than the change the company registered from 2011 to 2012, 24%. The cause we noted from the CEOs presentation is that voice revenue is slowing down but costs remain very high. Costs like operating costs (generators, diesel to run them, logistics etc..) and the cost of money borrowed.
Data is however picking up with now, 3.2 million mobile broadband subscriptions. But data doesn’t have the network restriction advantages that allowed voice revenue to flourish in a market where only 3 operators were licensed. Plus, the internet itself actually opens up gates for over the top services like Skype, Viber, WhatsApp and others that are eating ever faster into the traditional revenue streams.
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Here below are the major points we picked from the results:
- Revenue for the period was $694,843,608 up from $611,115,533 in 2012
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was $305,343,981 up from $290,894,326 in 2012.
- Profit before tax was $204,903,243, down from $239,129,909
- Profit after tax was $139,938,220 down from $165,741,088
- Data subscribers increased by 52% from 2.1 million to 3.2 million
- The company is not going to fight services like Skype and Viber, it’s going to configure the business to benefit from them.
- Subscribers increased by 62% from 1.3 million to 2.1 million
- The agency network has grown to 3,000
- EcoCash has processed transactions worth $1.2 billion since launch in September 2011 with 33% of that value in the last 3 months. They have processed about 55 million transactions since launch.