Econet to invest US$300 million in expansion
ECONET Wireless Zimbabwe says it will have invested an additional US$300 million on expanding and upgrading its network by February next year. This would take cumulative investment in mobile phone operations to about US$1 billion as the firm has already ploughed in over US$600 million.
Econet chief executive Mr Douglas Mboweni said the mobile firm had spent the money on equipment, technology upgrades and expansion projects. Mr Mboweni said the US$600 million investment by Econet could easily rank as the biggest in the country by a single company over the last 20 years.
“From the time we started operating in October 1999 up to the time we published our financial results in February this year we had spent about US$600 million. Between February this year and part of next year we are looking at putting another US$300 million to upgrade the equipment that we have and also extend network coverage throughout the country,” said Mr Mboweni.
He said that advanced equipment would enable the mobile telecommunications firm to grow its subscriber base and improve efficiencies. The mobile phone operator has seen its subscriber base grow from just over one million at the beginning of last year to over five million as of last month. Mr Mboweni said the company would set its next subscriber target at the beginning of the next financial year in March depending on service demand.
Asked to explain the reasons behind the challenges subscribers were having accessing services, Mr Mboweni said that was a result of upgrades to the network system, which comprises technology from different suppliers. Econet has over the years bought equipment from Ericsson in Sweden and ZTE of China. Upgrading the equipment sometimes disrupted the network.
Econet is now the country’s largest mobile phone operators followed by Telecel, which has about 1,2 million susbcribers and NetOne at about 600 000 subscribers. In the half year to June Econet churned out a set of impressive financial results reporting an 80 percent jump in revenue to US$235,5 million compared to US$131,5 million for the same period ending August 31 2009.
Profit before tax stood at US$64,3 million, an increase of 36 percent on the same period the previous year while the firm’s earnings before interest, tax, depreciation and amortisation stood at US$114,9 million to give earnings per share (EPS) of US$0,38 up from US$0,24 last year. The performance of the company, which includes results of its subsidiaries, was attributed to an increased mobile telephony subscriber base.
Zimbabwe’s largest mobile phone company introduced prepaid roaming services to cater for the high cross-border traffic especially into South Africa. Econet has since sought to capitalise on its large and increasing subscriber base by introducing products such as Ecolife, a collaborative life assurance product with First Mutual Life.
The product gives subscribers life cover from the country’s second largest insurer based on the prepaid airtime bought. Econet has also expanded its 3G coverage beyond Harare to other major cities and towns, a development set to contribute significantly to revenues in the future.