HomeBusinessEconet profits up 60%

Econet profits up 60%

Roadwin Chirara

ECONET Wireless operating profits have recorded a marked increase of 60% to close the half year at $306,2 billion.

However, the company has raised concern over the existing tariff regime in the country.

The technology counter said the current tariffs charged for calls on its network were far below break-even point.

Currently, the network charges an average of $3 000 per minute while its projected break-even point stands at an average of $5 000 per minute.

The company said at the current existing tariff regime the company will not be able to maintain its existing infrastructure going forward.

“Our tariffs have continued to lag behind the tariffs applied by other operators in the region and the world over. At these sub-economic tariffs, the network will not have the capacity to maintain the existing infrastructure,” the company said.

Econet said there was urgent need for a viable tariff which reflects the current position on the ground.

“To achieve the high mobile penetration rates that have been observed in other African countries, viable tariffs have to be kept in real terms and a solution to foreign currency shortages has to be found,” Econet said.

The company said it would continue with its efforts to engage the country’s telecommunications regulator on the matter.

“The group will continue to engage the regulator and other local network operators to ensure that the country earns more foreign currency through the implementation of economic international traffic termination rates,” said the company.

In the period under review, Econet’s earnings attributable to shareholders declined by 39% to close at $86,7 billion while its basic earnings per share declined by 35% to end the half year at $572,50.

The company’s revenue base increased by 35% from $806,8 billion to $1,09 trillion as a result of the increase in the subscriber base after the re-launch of its Libertie brand and increased airtime usage.

Econet’s subscriber base increased by 49% to end the half year at 258 268 compared to 173 606 subscribers in 2004.

Econet’s operating expenses increased by 365% while its net finance income increased by 390% to close at $73 billion from the previous year’s figure of $14,9 billion.

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