Econet decries erratic power supply




Econet chairman Dr James Myers

HARARE – Econet Wireless Zimbabwe has bemoaned erratic power supply in the country, saying this was negatively affecting service delivery while adding to the telecoms giant’s operational costs.

Zimbabwe faces acute electricity challenges, which see demand of 2 200MW outstripping supply of about 1 400MW, at best, due to limited generation and breakdown of aged equipment at the country’s second largest power station, Hwange.

However, the ongoing 600MW expansion project being undertaken by ZESA Holdings at the thermal plant, which is almost three quarters complete, is expected to a go a long way in ameliorating the power deficit.

Several independent power licences have been issued to developers as the country targets energy self-sufficiency and becoming a net exporter of electricity while plans are at an advanced stage for the joint project with Zambia to build the 2 400MW Batoka hydro power plant.

Chairman Dr James Myers said while the company continued to upgrade its base stations to alternative energy sources to keep service running, the expansion had seen costs ballooning.

“Load-shedding has continued to strain our service delivery and increased our operational costs. We continue to upgrade our base stations to alternative power options, notably solar and diesel generators, as best as we can, within the constraints of foreign currency availability.

“The cost and availability of fuel adds an additional challenge where our backup power is reliant on generators. These alternate power options are intended to ensure a more reliable source of power,” he said.

Dr Myers said, in a statement accompanying the group’s half year results to August 2021, that Econet had deliberately opted to use solar energy in order to minimise its carbon footprint, in line with Zimbabwe’s largest telecommunications giant’s  sustainability objectives

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) recently said while mobile operators’ revenues had been on the increase, operating costs had also increased in line with inflationary pressures as well as foreign currency shortages for procurement of equipment and softwares.

According to the POTRAZ, sector performance report for the third quarter of 2021, bandwidth costs, staff costs and depreciation were the main cost drivers for Econet and its peers during the quarter.

Despite the increased costs, Econet has continued investing in infrastructure to enhance service delivery while consolidating its market share.

Demand for Econet’s mobile broadband services continued to increase during the half year period, forcing the group to upgrade its 4G network in Harare and Chitungwiza, which has increased the data browsing speeds by 1,5 times.

“This reflects our commitment to improve customer experience. 18 new base station sites were commissioned across the country to provide network connectivity in new suburbs that were previously unserviced.

“We plan to commission over 215 new LTE sites country-wide to improve network quality and availability. In the next few months, we will start our 5G journey as we pivot to the next stage of our digital evolution,” said Dr Myers.

Meanwhile, during the six months period, Econet’s reported revenue increased by 95 percent to $29,6 billion, in inflation adjusted terms, anchored by the increased contribution of data services.

Data revenue grew by 136 percent while voice services revenue increased by 92 percent.

“Aggressive cost management resulted in earnings before interest, taxation, depreciation and amortisation (EBITDA) margin improving to 55 percent from 47 percent in the comparative period,” he added.

Econet’s exchange losses, arising from foreign currency-denominated obligations, decreased from $15,2 billion to $481 million in the half year period.

These losses arise because of the movements in the exchange rate on the foreign currency auction system and the consequent impact on the value of foreign currency liabilities, as expressed in the reporting currency.

In inflation adjusted terms, the telecoms giant recorded a $6,6 billion profit after tax up from a loss of $127,6 million recorded in the half year to August 2020, while revenues, in historical terms, surged from $6,7 billion to $27 billion.

Econet is the country’s largest mobile network service provider and largest counter on the Zimbabwe Stock Exchange by market capitalisation ahead of Delta. – Herald