Financial technology, data, mobile money spur profit jump for Zimbabwe’s Econet

Econet Media is making big moves, not only is it bringing the Kwese TV satellite television to homes across Africa, including Zimbabwe, but has also partnered with the biggest names in Video On Demand(VOD) services, Roku and Netflix to bring Kwese Play, a streaming service to Africa. Photo Supplied

 

Business Report and TechZim

 

Johannesburg and Harare – Increased focus on minimising costs and optimising income generation has propelled Econet Wireless, a Zimbabwean telecom group, to a massive revenue and profit jump, with financial technology, data, mobile money and value added services contributing more than voice.

Econet now has 11.4million mobile network subscribers, 8million mobile money users and 600 000 digital banking depositors on its Steward Bank unit. It paid about $60million (R755.7m) against around $23m in taxation to the government.

Econet’s profit for the year to end February 2018 surged from $36.2m to $132.3m, it said yesterday. Revenue strengthened from $621.7m to $831.6m in an environment where disposable incomes are under pressure owing to a flat-lining economy. “The customer only has a dollar to spend and what is your share of the dollar,” said Roy Chimanikire, the chief finance officer at Econet.

Econet cut costs by reducing the salaries of workers by 20percent. There have also been reports that the company cut payments to suppliers by 20percent. The company has since declared a 5.8cents dividend for the period under review compared to 2.6c in 2017.

This has amounted to a comprehensive dividend amount of $60m for the period. Capital expenditure for the period was also higher at $102.7m against $33m in the year earlier contrasting period.

The company had to carry out an offshore rights issue in 2017, but failed to execute its debentures on a foreign exchange owing to regulatory bottlenecks.

“While the board had expected to list debentures issued by the company shortly after the rights offer on a foreign securities exchange, the relevant regulatory authorities did not approve the company’s request for a sinking fund account, which would have been used to repay the debentures into an external foreign currency denominated account,” said James Myers, the chairperson of Econet.

Econet has also ventured into media through its Kwese TV pay television platform that has taken competition direct to MultiChoice Zimbabwe’s door.

Elitist service

Douglas Mboweni, the chief executive of Econet, said Kwese TV was reconstituting the view of satellite television as an elitist service.

Kwese obtained Zimbabwe licensing this year after a lengthy battle with authorities, despite having rolled out its services elsewhere across the continent.

Econet has faced other regulatory issues, with the government pushing for infrastructure sharing.

“We have diversified our product portfolios to ensure we provide services in the financial services sector, in agriculture, in education, insurance and many other areas that touch people’s lives and meet their needs,” Mboweni said.

Meanwhile Econet Tech Expo (Expo) was this week marked by the announcement saying that Kwese will be broadcasting all 64 World Cup matches. Another significant highlight of the Expos was signified by the unveiling of Kwese’s new ‘Kwese-iflix’ mobile App, reports TechZim.

iflix is a subscription video on demand (VOD) service focused in emerging markets. The Kwese-iflix mobile App “will allow Econet Wireless mobile subscribers the choice to access a wide array of on-demand content, as well as live broadcast content. Due to their recent awarding of Video on demand licences Kwese-iflix will be the pioneering platform to utilize the license.

Kwesé-iflix mobile app is a product conceived out of a joint venture between Econet Media, the pan-African company that owns the Kwese brand and iflix. Via this app Kwese will also broadcast the World Cup as part of its inititive to televise the event across all of its digital platforms.

The Kwese-iflix app seems to have replaced the Kwese Pulse app which Kwese silently introduced last week. Kwese leveraged its ownership in iflix by using iflix’s readily available app on Google Playstore and rebranding the app to suit its Kwese platform ( Kwese-iflix).  The app caters for both Android and Apple users since it will be available for download on Google Play store and the Apple App store.

The users of the Kwese-iflix mobile App will have a flexible digital entertainment platform as the app makes it easier for them to access top entertainment programmes via their mobile phones, anytime and virtually everywhere.

 

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