Econet defends market share as demand comes off

  • Market share grew compared to the prior year
  • Traffic volumes subdued
  • Incessant power supply shortages impacted base station running costs
  • Deployment of solar equipment and hybrid batteries at an advanced stage

Harare – Zimbabwe Stock Exchange heavyweight Econet Wireless Zimbabwe Limited market share grew in the nine months period to November 2019 compared to the prior year owing to the volume growth in voice minutes, data and SMS traffic.

The company said the growth is reflective of the strong demand in the market for their products and services, hence maintaining their top position in the sector with a customer market share of about 70%.

Nevertheless, Econet recorded subdued traffic volumes in the nine months to November compared to the previous quarter due to the headline tariff adjustments in August 2019 and October 2019.

“Traffic volumes declined from the previous quarter following the headline tariff adjustments in August 2019 and October 2019″, says the company.

Despite the approval of tariff increases by Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) in August and October 2019, the company’s tariffs continue to lag behind inflation and given the rapid local currency depreciation since February 2019, the tariffs are now at sub economic levels.

The company together with other industry players continue to engage with POTRAZ in an effort to go back to a tariff regime that ensures continued viability of the sector as well as ensure that quality of service standards is maintained.

In addition to the sub-economic tariff, Econet said erratic grid power supply and escalating fuel costs significantly impacted base station running costs.

Following the implementation of solar energy by most companies in the country to manage the power supply shortages, Econet also stated that deployment of solar equipment and hybrid batteries across their base stations and switching centres is now at an advanced stage.

Zimbabwe is experiencing deteriorating macroeconomic fundamentals that comprise an eroding local currency and incessant foreign currency shortages and these are expected to negatively impact the financial performance of the Group.

Econet’s investment in Liquid Telecom Holdings has however resulted in a net positive foreign currency asset position.

“However, our investment in Liquid Telecom Holdings more than offsets our exposure to foreign currency vendor obligations resulting in a net positive net foreign currency asset position.

In the outlook, the company said they will continue to focus on market leadership through understanding its customers and proving service quality that is unparallel in this market.

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