Econet cashes in on new frontiers

ECONET Wireless Zimbabwe (Econet)’s telecommunications, media and technology (TMT) strategy has paid off after the company posted record revenue for the half year ended August 2018, spurred by the triangular offensive.
Established in 1998, the group has grown from being just a telecommunications company to a full TMT outfit with a full suite of media and technology services to complement its mobile network operations.
The group reported a 70 percent increase in revenue for the half year, from $352,7 million in 2017 to $600,3 million — a post dollarisation record.
“This substantial growth was underpinned by the successful execution of the regionalisation strategy. The TMT strategy accounted for the solid revenue performance in data and financial mobile money segments,” James Myers, Econet’s board chairman said in a comment accompanying the group’s financial results which were published recently.
“Our TMT strategy has been hugely successful and has created a strong business with converged standalone yet interdependent businesses across multiple industry sectors. Our smart technology businesses Cassava SmarTech (Cassava) have anchored financial inclusion and digital transformation in various sectors in Zimbabwe,” he added.
The listed group’s profit after tax was up by 153 percent to $123,6 million compared to the same period in 2017.
Voice revenue’s contribution to total income has declined over the years coming from a high of 76 percent in 2014 to a low of 36 percent during the period under review.
Meanwhile, data and mobile money have emerged as key revenue drivers underpinned by the TMT strategy.
Revenue from Cassava operations under the technology cluster, went up by a 152 percent to $235,1 million.
Ecocash accounted for 70 percent of total Cassava revenue up from 56 percent in the prior year.
Cassava is the parent company under which services such as EcoCash, EcoSure, EcoFarmer and others are housed. It is currently being spun off by the group and will be listed on its own on the Zimbabwe Stock Exchange (ZSE).
“While traditional voice remains under threat, new avenues for growth are emerging and a great deal of the innovative solutions is being spearheaded by Cassava, which also justifies its unbundling.
“There is an imminent need not only to unlock shareholder value but solicitation of resources demanded further growth. This will enable the exploitation of immense opportunities in Cassava’s way coupled with consolidation of existing businesses,” Equity Axis, a local research firm said in a comment published recently.
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