Econet cuts physical airtime sales to 10%

ECONET Wireless Zimbabwe has reduced physical airtime sales to 10 percent in line with the Reserve Bank of Zimbabwe directive regarding the phasing out of physical airtime distribution by mobile network operators.

Last year, the Reserve Bank of Zimbabwe through its Financial Intelligence Unit proposed the phasing out of physical bulk airtime recharge sales and put a cap on individual electronic purchases, citing the need to curb the rampant abuse of the platforms by illicit currency speculators.

The central bank unit stated that airtime dealers and individuals will have to use electronic recharging as physical airtime sales are being reduced to 20 percent and below.

In a trading update for the first quarter ended May 31, 2022, Econet said:

"Following the RBZ directive regarding the phasing out of physical airtime distribution, we reduced physical airtime sales from 20 percent to 10 percent of total airtime distribution and conversely recorded an uptake of airtime via electronic means.

"The business continues to explore measures to address the limitations for customers that are not able to easily access airtime using virtual platforms."

Mobile network service providers have welcomed the directive saying it will help them cut on production costs as well as respond to environmental concerns regarding littering.

Econet, which is the first in the country to roll out 5G service in Harare towards the end of the last financial year said, in the quarter under review, the 5G service was further rolled out to Bulawayo during this year's Zimbabwe International Trade Fair and in Victoria Falls as well as in Chitungwiza.

This has brought the total number of 5G sites rolled out to 22.

In the quarter under review, the company added 100 new 4G sites to improve network and speed of data connectivity.

"Persistent national grid power outages have affected network quality and reliability, thereby necessitating us to increase our efforts to augment our power supply with solar power. However, as inflation increases and disposable incomes are coming under more pressure, there is a discernible increase in the theft of diesel, batteries and solar panels.

"In response, we have enhanced security at our sites to counter the effects of increased vandalism and theft," said the mobile network operator.

Econet said in the quarter under review, its voice and data traffic grew by six percent and 18 percent respectively over the previous quarter.

The firm attributed this growth largely to its customer acquisition strategy.

"As previously reported, significant foreign currency losses continue to be recorded due to the weakening exchange rate which deteriorated by 172 percent for the quarter under review. Our access to foreign currency remains severely constrained creating further challenges in implementation of necessary network upgrades to assure the continued level of high quality service experienced by our customers," said Econet.

In the outlook, the telecommunications operator said tariffs remain below viable level and the group hopes that in the near term, a scientific and fact-based approach to setting tariffs will be adopted taking into account the movements in the telecommunications price index.

"This will allow the group to remain focused on delivering high quality digital services across the country by being able to invest sufficiently to absorb the increasing demand for its services.

"The rural population remains marginalised in terms of full access to digital services with less than 20 percent of devices in the country being LTE/4G capable," said Econet.