NetOne, the state-owned mobile operator and the country’s second largest network by subscriber numbers has published its unaudited financial results for the half year ended June 2015 in the Sunday Mail.
This is the first time that NetOne has published its results, and according to the opening remarks contained in the presentation, it is in line with recommendations of the National Code on Corporate Governance. NetOne follows the steps taken by TelOne, another state-owned telecoms operator that published its affairs last month.
Comparison against the same period last year showed a 66.4% increase in network investment to $5,593 million, a 28% increase in subscriber numbers to a 3,556,688 total and a 13.8% increase in revenue to $57,824 million compared to the previous period’s $50,805,311. NetOne’s total equity and liabilities stood at $486,059,212.
The red flag for NetOne’s figures, however, was the $5,867,439 loss during the period. In the statement from NetOne’s board Chairman Alex Marufu accompanying the results, he highlighted a number of factors in the operating environment as challenges to the revenue generation capacity of the mobile operator.
These included the decline in disposable income, the 5% excise duty introduced in 2014, the 35% tariff reductions in effected in January 2015 and the introduction of a 25% customs duty on mobile devices.
This is the same deadly cocktail of challenges that Econet Wireless, the country’s leading mobile network and NetOne’s biggest rival has been lamenting over the past year and outlined in its own weakened financial results earlier this year.
Econet has gone further to isolate the negative role of regulatory interference in creating a non-conducive operating environment for telecoms operators, something that NetOne, as a State enterprise, might not have done so explicitly in its own financials, even though it acknowledges these factors as setbacks.
NetOne, however, is leaving the blame on the door of broadband investment, having identified the net loss as having been,
weighed down by a substantial investment in additional spectrum required to make the commitment in ZimAsset to provide ubiquitous internet connectivity a reality.
This is a reference to the efforts behind the $218 million 4G/LTE project which has placed NetOne as the holder of the widest LTE network in the country. This same project highlights a huge part of netOne’s future strategy which, according to this latest statement, is geared on network utilisation and product diversification.