THE Zimbabwe Stock Exchange listed diversified telecommunications group Econet Wireless has called for an upward review of tariffs saying it was the only way to save the ailing telecommunications sector from collapsing.
The company said it is heavily constrained by the ongoing foreign currency shortages.
In the results statement for the year ended February 28 2021, Econet chairman James Myers said the foreign currency shortage has crippled its operations.
“Foreign currency availability continues to be the biggest hurdle facing the Company. 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,” he said. “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.”
Myers called for a review of the tariff to ensure that the sector remains afloat.
“Our headline tariffs were last reviewed in August 2020. Given the inflationary pressures experienced, we believe that another tariff review is due in order for the sector to remain viable,” he said. “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.”
He pointed out that the lack of consistent, high quality grid power supply remains a challenge.
“ This means that we make use of diesel-powered generators to supplement what we draw from the national grid. As a result, we continue to see an increase in our carbon footprint as well as the cost of doing business. We continue working to enhance our green footprint and reduce carbon emissions by increasing the number of solar powered base station sites,” he said
Myers said the increase in revenue has been as a result of the increase in demand for data.
“Revenue increased to ZW$ 35 billion, an increase of 23% from the previous year, largely due to the increase in data usage, which increased by 47%. Improving operational efficiencies and continued cost containment measures yielded positive results which saw the earnings before interest, taxation, depreciation and amortization (EBITDA) margin increase to 52%.,” he said. “Net exchange losses decreased by 46% to close the year at ZW$ 13.7 billion. Capital expenditure investment remains subdued due to the scarcity of foreign currency. Our earnings per share increased from a loss of 237 cents per share to positive earnings per share of 35 cents. Our cash flow remains positive and we continue to manage 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.”
He revealed that the company has increased its subscribers by a marginal 2% during the period. The Company has declared a final dividend of ZWL 60 cents per share which brings the total dividend paid to ZWL 100 cents per share. – Newzim