Home » Industry » Econet Remits U.S.$1 Billion to Fiscus

Mobile network operator, Econet Wireless Zimbabwe, says it has remitted $1 billion to the fiscus in taxes, fees and other levies since the dollarisation of the economy in 2009.

Econet said that this contribution and that from other operators in the sector reflects the importance of the telecoms industry to the recovery and growth of the domestic economy.

“Through supportive policies, the sector has immense potential to continue to contribute to national development and complement Government efforts in economic development,” the company said in its financial results for the full year to February 28, 2015.

The performance for the period under review showed a 41 percent dip in after tax profit to $70,2 million, which Econet attributed to the introduction of a 5 percent levy on airtime sales, 25 percent duty on handsets and 35 percent tariff reduction on voice calls.

Because of this the company, one of the largest employers in the country, said it has had to stop employment creation and was worried about job losses that now look inevitable due to the challenges.

Zimbabwe’s biggest mobile network operator, with over 9 million customers, said it had invested a staggering $1,2 billion into infrastructure over the last five years, partly the reason why it is resisting Government calls to unconditionally share its infrastructure with competitors that have invested less.

Econet said network investment reached $125 million during the last financial period in what it said contributed to maintaining its relevance and dominance on a technologically dynamic market.

The investment sustains the jobs of over 2 000 direct employees and over 35 000 indirect jobs and has given the network capacity to carry an additional 2 million users.

“More than 20 000 small businesses across the country, particularly in rural areas, receive regular income from selling airtime and transacting for EcoCash,” Econet said.

Commenting on its performance for the financial year to February, Econet said that revenue was little changed at $746 million, representing less than one percent decline.

The mobile network operators generated a total of $907,3 million in 2014. This represents 17,9 percent decline in revenue from $1,1 billion recorded the previous year.

Econet has, however, been able to hold its revenue steady and prevent significant decline through innovation, sweating its expansive infrastructure for new revenue streams.

“Despite the changes, challenges and increasing complexity of the operating environment, the business continues to introduce new innovations that address the needs of its customers while also diversifying its sources of revenue,” the company said.

New innovations it has brought to ride on its infrastructure include EcoCash, EcoSure, EcoHealth, EcoFarmer and connected car vehicle tracking. It said while the services have taken time to yield the desired results and the returns thus far have been encouraging.

The services contributed $72,7 million in the period to February 2015, which represents 65 percent growth on prior year while broad generated $103 million, 42,3 percent jump.

Its associate, Liquid Telecom has built more than 7 000 kilometres of fibre in the country, deemed the most extensive optic fibre network in the region, including South Africa.

Source : The Herald