Tawanda Karombo Harare

Zimbabwe’s Econet Wireless, the telecommunications company owned by locally based Zimbabwean businessman Strive Masiyiwa, yesterday reported an 8 percent surge in revenue and after-tax profit of $119 million (R1.25 billion).

The biggest telecommunications company in Zimbabwe said data and overlay services accounted for about 14 percent of the group’s $752.7m revenue.

Econet Wireless would pay a dividend of 1.29c a share for the year to February, the first time it has paid a dividend in three years, according to chief executive Douglas Mboweni, who denied journalists access to the results briefing yesterday.

Only $20m of the profit would go to dividends, with the company saying the balance would be reinvested into the business and used to pay off international bank loans.

Econet Wireless’s competitors in Zimbabwe are state-owned NetOne and Telecel Zimbabwe, and a fixed-line operator, state-owned TelOne.

A report by research company Gallup this week showed Zimbabwe ahead of the rest of Africa in the use of cellphones, with penetration having grown from 26 percent in 2008 to 80 percent last year. Mboweni said in a press release that penetration was now in excess of 103 percent.

Econet has led the massive mobile category of the telecoms sector after it branched off into mobile money and other overlay services, such as broadband services.

Mboweni said yesterday that the increase in turnover for the year to February was “largely driven by the growth in data and overlay services”.

He said voice revenue growth had “remained flat as voice had now matured” in line with global trends. The average profitability of revenue per user from voice telephony services is under pressure from new platforms such as WhatsApp, Facebook and Viber.

Officials at the company have previously pointed to the need for innovation to deepen revenue streams.

Although the company added 780 000 subscribers onto its network, taking its subscriber base to about 9 million, “new customers coming onto the network were no longer able to contribute significantly to growth in revenue”.

However, overlay services – such as the EcoCash mobile money platform and data services – had grown, contributing significantly to overall revenue growth for the period. The SMS category had been overtaken by instant messaging apps and further affected prospects for revenue growth.

“When you reach more than 100 percent penetration of service in any country, it means that virtually everyone now has a phone.

“This situation is not unique to Zimbabwe. It has happened elsewhere, and so we had long anticipated it and had begun to invest heavily in new services,” Mboweni said.

Although Econet has notched up marked growth, overcoming turbulent times in the Zimbabwean economy, the company has huge long-term debts. A big portion of the $119.4m after-tax profit will be used to service the $228m it owes for network expansion over the past few years.