Econet says present tariffs are unsustainable

While Zimbabweans are complaining about the high tariffs being charged by cellular telephone networks, and most have resorted to using their phones for receiving calls and sending messages, Econet Wireless says the networks are charging some of the lowest tariffs in the region.

It is, for example, charging only 1.3 US cents per minute while in neighbouring Botswana, Mascom, in which Econet has some shares, is charging 30.6 US cents.

Econet in Lesotho charges 27.1 US cents, the same tariff charged by MTN in South Africa. Econet Wireless in Nigeria charges 32.3 US cents a minute.

Econet says the present tariffs are unsustainable and are insufficient to support network expansion and the inevitable replacement and operating costs of an ageing network.

The company says the number of subscribers increased marginally between June last year and June this year from 139 402 to 144 353 as the company concentrated on reducing congestion levels.

The company spent $6.5 billion on network expansion but this was mostly to improve quality of service for existing subscribers mainly in Harare and Bulawayo because geographical expansion was not considered prudent because of the current unviable tariffs.

It says average revenue per user has declined constantly in US dollars from US$34 in June 2000 to US$7.42 last year and US$5.44 this year.

The company says its net profit declined by 43 percent in US dollar terms from US$2.6 million to US$1.5 million but it soared by 640 percent in Zimbabwe dollar terms from $1 billion to $7.6 billion.

Sales increased by 311 percent from $6.1 billion to $25 billion. Operating profit was up 625 percent from $2 billion to $12.1billion.The company reduced its debt from $2.2 billion to $660 million.

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