New Zimbabwe (London)

1 August 2014

Zimbabwe: Econet Keeps Lid On Tariffs, Eyes Data for Revenue Growth

THE Country's largest mobile phone operator, Econet Wireless says it will not engage in a tariff war with rivals, which could dim the company's outlook as the economy was underperforming, chief executive Douglas Mboweni said on Friday.

He told shareholders at the company's annual general meeting that Econet would invest more into broadband over the next year to counter the continuing fall in revenues from voice services.

"Much of the competition has focused on price slashes. While we will continue to offer competitive promotions, we will not go into all out price war with the competition. We believe this is not sustainable.

"As a business, our priority is to build a business that is sustainable over the long term for the benefit of our stakeholders, from our customers themselves and to investors," Mboweni said.

The economic environment was increasingly tough with voice revenues declining the world over, including Zimbabwe, he said, adding that Econet continued to work on strategies to remain profitable.

"This is why Econet is increasingly looking to broadband and other overlay services to drive growth going forward. Non-voice services, such as broadband and EcoCash, accounted for 19 percent of revenue in the last year. The company is looking to grow this by investing in new services to increase usage of non-voice products," he said.

"Our main focus used to be voice, but technology is changing from traditional revenue streams to broadband and overlay services. We are now investing more to take advantage of the vast infrastructure we have built to develop a broad range of new services for our customers. This is what is needed to keep us relevant as a business."

Mboweni said the company would push for more usage of smartphones to drive revenue from data and broadband services.

Official figures show that smartphone penetration rate in Zimbabwe is currently around 10 percent, which is far less than in other markets in the region.

Mboweni said the new partnership between EcoCash and MasterCard was also expected to drive volumes.

Econet reported a 15 percent drop in profit to $119,4 million for the full year to February.

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