Econet may ‘wean off’ Ecocash

BUSINESS

By Alfonce Mbizwo, Harare, Zimbabwe

Zimbabwe’s largest mobile phone operator Econet Wireless says it may wean off its successful mobile money transfer service, Ecocash, as it seeks to boost its growth.

Chief executive Douglas Mboweni told an analysts' briefing that that the company will pursue various models on Ecocash, one of which may be weaning it off for it to become a separate business unit – depending on the size of volumes.

Ecocash has 1.7 million subscribers and 1 600 agents and has, since inception, transacted USD300 million worth of transfers. Ecocash was now handling average monthly transactions of USD70 million, Mboweni said. 

The company reported a 4.5% rise in half-year earnings, mainly driven by subscriber growth. Subscriber numbers grew 9% to 7 million in the year, driving revenue up to USD340 million from USD291 million previously.

Econet's basic earnings per share rose to USD0.46 during the six month period to August, compared to $0.44 the previous year.

“Since dollarisation the company has given USD74 million in dividends, USD100 million in share buybacks, USD1billion in investment and USD500 million in taxes”.  

Further, he said, coming from a period of severe disinvestment pre-2009, the company had to concentrate on building up capital for the generation of cash flow for long-term investors. 

“Econet is working on increasing dividend cover ratio,” Mboweni added.

Airtime sales contributed 66% of revenue, down 1% and 10% towards revenue growth while interconnect and roaming fees and Data, SMS and internet services stagnantly contributed 16% and 13% respectively.

Other services sales showed a marginal growth up 1% to 5% on last year.  Data revenue picked up 50% to USD21 million on last corresponding half year mainly from corporate subscribers and swelling Smartphone usage.

Econet has over 70% of the Zimbabwe mobile phone market.