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Telecel mulls diversifying revenue streams

TELECEL, the country’s second largest mobile operator, plans to diversify its revenue streams in the wake of declining short message service (SMS) in the mobile sector.

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SMS has been a victim of cheap instant messaging such as WhatsApp, which is a hit on the local market.

 

 
Telecel CEO, Francis Mawindi, told Standardbusiness last week that the diversification of the product portfolio was designed to tap into new revenue streams. “Currently, voice is still providing the bulk of our revenues. Data is the next revenue stream and is increasing very fast while SMS is steadily declining and we are proactively diversifying our product portfolio as we look for new revenue streams that can allow us to increase our Average Revenue Per User (ARPU), a key metric in our business operation,” said Mawindi.

 
“Improving ARPU has a direct positive knock on impact on our earnings growth.”

 
He said the revenue mix was the same as what was obtaining in the region, “but at a much faster pace due to the high literacy rate in the country”.

 
Mawindi said the rate of adoption was influenced by the availability of data capable devices, which are still highly priced in the country.

 
“I believe that bandwidth costs are also still on the high side, affecting the final price of the data service and its mass adoption,” he said.

 
Mawindi assumed the reins at Telecel in June with a mandate to grow the mobile operator in terms of subscribers, customer satisfaction and profitability.

 
Telecel’s subscriber base stood at 2,2 million in August, less than a third of Econet’s market share of seven million. Yet despite its growth potential, Telecel has been a battleground for shareholders.

 
Telecel is owned 60% by Telecel Globe, a subsidiary of Orascom Telecom Company, and 40% by the Empowerment Corporation, a local consortium.

 
Some shareholders in the Empowerment Corporation are arguing that 20% shareholding had been illegally transferred to Telecel’s foreign shareholders.

 
In addition, some hardliners in the local consortium have been pushing for the mobile operator to allow locals own at least 51% in line with the empowerment laws.

 
Mawindi said at the shareholders level, there are discussions to end the disputes.

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