ECONET Wireless Zimbabwe last week escalated the telecommunications industry’s push for a tariff hike, saying rates last reviewed by the Postal and Telecommunications Regulatory Authority last year were no longer sustainable in a high inflation environment.
Zimbabwe’s telecoms industry has struggled as hard-pressed consumers cut down on telecommunication budgets to focus on basic commodities.
“Our headline tariffs were last reviewed in August 2020,” chairman James Myers said Friday in a commentary accompanying the firm’s financial results for the year ended February 28, 2021. Given the inflationary pressures experienced, we believe that another tariff review is due in order for the sector to remain viable. All our pricing is determined by the regulator using given cost inputs.
“The timely adjustment of tariffs, using the telecommunications pricing index, is critical to our continued viability as a business.”
The calls for a tariffs hike comes at a time consumers are complaining about high data costs amid a depressed economy and shrinking wages. However, for Econet, increased tariffs would mitigate against shortages of foreign currency, said by Myers to have hampered operations.
“Foreign currency availability continues to be the biggest hurdle facing the company,” he said. “This has constrained our ability to provide adequate capacity to our customers. The company has encountered operational challenges to meet its capacity enhancement and routine maintenance requirements.
“We remain hopeful that the improvements in foreign currency availability due to interventions by the fiscal and monetary authorities will improve this situation in the foreseeable future.”
Zimbabwe’s largest mobile phone network operators overturned a $5,7 billion loss during the year ended February 28, 2020 to report a $836,52 million profit during the period under review.
Profitability was enhanced by an increase in revenues to $35 billion during the review period, from $28,53 billion in 2020.
“Our earnings per share increased from a loss of 237 cents per share to a positive earnings per share of 35 cents,” Myers said. “Our cash flow remains positive and we continue to manage our cash position prudently in light of the challenging operating environment.
“Our balance sheet is bolstered by our investment, of about 7% of Liquid Telecommunications Jersey (LTJ), a Pan-African fibre operator, which is now valued at US$ 145 million.”
The value of Econet’s assets increased to $66,8 billion during the period under review, from $66,06 billion in 2020.
“As we transform our business to a digital services provider from being primarily a communications service provider, we aim to develop resilient business models that are relevant to our customers and our operating environment,” Myers said.
“Our services are gradually changing as we pivot the business to the new realities that we see emerging, as consumers demand a different digital experience as the world evolves and technology changes to cater for the new needs and expectations of our society.”
He said Econet believed that it would play a part in the resurgence of Zimbabwe’s economy through providing world class services to support the enhanced growth and digitalisation of the economy.