• Tax contributions surged to ZWL3.8 trillion, 26% of turnover
  • Volume growth of 34% for voice and 36% for data
  • Revenue growth to ZWL14.8 trillion but net loss reached ZWL1.1 trillion

Harare- Econet Wireless Zimbabwe, the country's largest telecom operator, contributed a staggering ZWL3.8 trillion to the government and statutory bodies in the fiscal year ended February 29, 2024. This figure represents a significant increase compared to the ZWL2.1 trillion paid in the previous year.

The substantial payments made by Econet constitute a hefty 26% of the group's total turnover for the reported period. These contributions were in the form of various taxes and fees, including excise duties, levies, corporate taxes, customs duties, withholding taxes, and monthly license fees.

Zimbabwe's tax regime appears to be quite burdensome, with the country's telecom sector facing high charges in the form of custom duties, corporate taxes, license fees, levies, and withholding taxes.

With currency problems due to its rapid currency devaluation, Econet has experienced exchange losses that have choked at least 22% of its revenues from 23% last year.

The high tax environment, currency instability, elevated electricity costs, and frequent power outages make Zimbabwe one of the most challenging economic environments for businesses to operate in within the SADC region.

While Zimbabwe is not considered one of the economic powerhouses within the Southern African Development Community (SADC) region, it still maintains a relatively high tax burden compared to its peers. The corporate and withholding tax rates in Zimbabwe are among the higher end for the SADC region, further exacerbating the difficulties faced by businesses operating in the country.

As a result, despite revenue of ZWL14.8 trillion, which was up 133% year-over-year, the group's net loss accelerated by a staggering 245% to reach ZWL1.1 trillion.

However, Econet is leveraging artificial intelligence (AI) to help improve operational efficiency.

In the group's financial year 2024 results, the chairperson, James Myers, stated that Econet "significantly accelerated the use of AI tools to improve operational efficiency, optimize our business and provide superior customer experiences." This increased reliance on AI has already become an integral part of the company's business operations.

To improve usage and revenue, Econet integrated intelligent recommendation engines and predictive models into its daily operations. This has enabled the company to deliver a remarkable 47% growth in usage in the voice segment.

Econet can also leverage AI in various ways with one key application being predictive maintenance, where it can utilise AI algorithms to analyse network data and equipment performance. This proactive approach helps the company avoid costly unplanned outages and downtime, reducing the associated administrative expenses.

As the telecommunications industry continues to evolving, the strategic implementation of AI-based solutions can provide Econet with a competitive edge by streamlining its operations and enhancing overall efficiency.

During the period, Econet's investment in network modernization resulted in significant volume growth of 34% for voice and 36% for data. Additionally, the cost optimization strategies adopted by management had a positive impact on margin profitability, which exceeded 45%.

The group modernized its network infrastructure, upgrading over 1,012 sites with 4G high-capacity base stations. Of these, 750 are located in the major metropolitan areas of Harare, Bulawayo, and the Manicaland region.

The company's commitment to network modernization is ongoing, with plans to add another 550 base station sites across the country in the near future. This investment in improved network capacity and coverage is expected to further drive growth in voice and data usage.

Alongside its operational initiatives, Econet has also managed to maintain financial stability, declaring and paying an interim dividend of 0.55 US cents per share for the year ended February 2024. This dividend payout demonstrates the company's ability to generate shareholder value despite the challenging economic environment in Zimbabwe.

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