Business / Companies
Econet owed $85 million by fellow telecom companies
19 Jul 2012 at 10:50hrs | Views
Econet Wireless Zimbabwe (Econet) says it is owed in excess of $85 million by fellow telecommunication companies in interconnection fees.
Econet chief executive Douglas Mboweni presenting oral evidence in Parliament said the figure, which Econet chairperson Tawanda Nyambirai recently said stood at $75 million, has gone up.
"One of the biggest challenges we have and I must say it is a very worrying challenge is that we continue to see non remittance of interconnection fees by our colleagues in the industry," he said.
"This is revenue that we are taxed upon as Econet and yet at the same time it is revenue that is uncollected."
He said although the company had a legal claim it was still engaging the companies to recover the funds.
"One way is to take the legal route and attach property, When it comes to interconnection what normally happens for example is that when it passes from NetOne to Econet, it passes through two networks it is generated in NetOne and then it has to jump into an Econet structure," Mboweni said.
"It is standard practice that when it then goes into our network we charge each other what we call the interconnection fee and that fee is $0,07.
What this presupposes is that when NetOne collects $0,18 or $0,17 people need to understand, they have simply not passed on the money," the Econet boss said.
"What this means is they have been collecting the seven cents and keeping it to themselves."
Mboweni said the mobile operator was incurring cost of up to $15 million annually to power cuts.
"We have had to employee staff that would maintain the base stations while also incurring transport and fuel costs," he said.
Econet reported a $165,7 million profit after tax in the year ended February 2012, up 18 percent from $141 million last year.
The group's revenue went up by 24 percent to $611 million during the period under review.
Earnings before interest, depreciation, taxes and amortisation increased by 20 percent to $290,8 million while total assets went up 27,4 percent to $812,4 million.
Debt to equity ratio stood at 65 percent, recovering from 86 percent in the previous comparable period.
Basic earnings per share were $1 from 83 cents.
Total liabilities closed the period under review at $429,6 million from $347 million as at February 28, 2011.
The cellular network company - with over 5,5 million subscribers out of Zimbabwe's approximately 12 million population - said its new products where experiencing exponential growth.
Econet recently launched a mobile money transfer facility, EcoCash which saw over one million subscribers registered in less than six months.
Econet chief executive Douglas Mboweni presenting oral evidence in Parliament said the figure, which Econet chairperson Tawanda Nyambirai recently said stood at $75 million, has gone up.
"One of the biggest challenges we have and I must say it is a very worrying challenge is that we continue to see non remittance of interconnection fees by our colleagues in the industry," he said.
"This is revenue that we are taxed upon as Econet and yet at the same time it is revenue that is uncollected."
He said although the company had a legal claim it was still engaging the companies to recover the funds.
"One way is to take the legal route and attach property, When it comes to interconnection what normally happens for example is that when it passes from NetOne to Econet, it passes through two networks it is generated in NetOne and then it has to jump into an Econet structure," Mboweni said.
"It is standard practice that when it then goes into our network we charge each other what we call the interconnection fee and that fee is $0,07.
What this presupposes is that when NetOne collects $0,18 or $0,17 people need to understand, they have simply not passed on the money," the Econet boss said.
"What this means is they have been collecting the seven cents and keeping it to themselves."
"We have had to employee staff that would maintain the base stations while also incurring transport and fuel costs," he said.
Econet reported a $165,7 million profit after tax in the year ended February 2012, up 18 percent from $141 million last year.
The group's revenue went up by 24 percent to $611 million during the period under review.
Earnings before interest, depreciation, taxes and amortisation increased by 20 percent to $290,8 million while total assets went up 27,4 percent to $812,4 million.
Debt to equity ratio stood at 65 percent, recovering from 86 percent in the previous comparable period.
Basic earnings per share were $1 from 83 cents.
Total liabilities closed the period under review at $429,6 million from $347 million as at February 28, 2011.
The cellular network company - with over 5,5 million subscribers out of Zimbabwe's approximately 12 million population - said its new products where experiencing exponential growth.
Econet recently launched a mobile money transfer facility, EcoCash which saw over one million subscribers registered in less than six months.
Source - Daily News
