HARARE – Zimbabwean blue chip telecom company, Econet Wireless, has intensified deployment of hybrid batteries from Tesla as well as solar equipment to cover for revenue losses arising out of power outages.
Alternative power sources helped the ZSE-listed company to raise voice, data and text message for the nine month period to end November.
However, volumes for the quarter to end November were lower compared to the quarter ending August 2019 “following the headline tariff adjustments” effected in August and October of that year, it said in a trading update Thursday.
The depressed operating environment, which has given rise to elevated inflation and stretched disposal incomes, has forced Econet to “customize consumer packages to maintain affordability”.
Charles Banda, the company secretary for Econet Wireless, said on Thursday that the company was seeking a tariff raise as current tariffs for its telecom services had been eroded by inflation.
“Our tariffs continue to lag behind inflation and given the rapid local currency depreciation… the tariffs are now at sub-economic levels,” he said.
Banda said: “The company together with the other industry players continues to engage with the Posts and Telecommunications Regulatory Authority of Zimbabwe in an effort to go back to a tariff regime that will ensure continued viability.”
Viable tariffs would help ensure “quality of service” and standards amid rising complaints about telecom service standards.
During the nine month period to November 2019, voice, data and SMS volumes surged by 20 percent, 26 percent and 7percent, respectively.
Econet said this was “reflective of the strong demand in the market” for such services despite deteriorating macro-economic fundamentals worsened by low industry output, high unemployment and the re-emergence of hyper-inflation.
Apart from voice, data and SMS services, Cassava Smartech, which was spun off Econet and which holds its EcoCash mobile money platform said transaction volumes on the platform had surged during the same period.
“Transactions processed on our mobile money platform increased by an average 19percent (for the nine month period to end November) while the number of active customers also increased by 17 percent in the same period,” Cassava, which is also listed on the ZSE, said in a separate trading update.
Power outages have also been problematic for Econet, prompting management at the company to install hybrid batteries.
Norman Moyo, the chief executive for Econet Energy, said in June last year: “We were impressed with the performance of Tesla Powerwall during the trial stage. It addresses the power back up requirements, offers 100 percent depth of discharge and has a wide temperature operating range.”
On Thursday, Econet said in its trading update that deployment of solar equipment and hybrid batteries across its base stations and switching centers was “now at an advantage stage”. Diesel generators had come at a higher cost for the company given fuel supply constraints and price increases in Zimbabwe.
In December, Econet said revenues for the half year to end August 2019 amounted ZWL1.3 billion. Company chairman, James Myers, also cited foreign exchange losses for the period arising out of local currency depreciation.
“The Earnings Before Interest Taxation, Depreciation and Amortization (Ebitda) margin was 42 percent. Management implemented appropriate cost efficiency strategies in light of the deteriorating economic environment,” said Myers in December.