Econet suffers service demand decline in Q1

Econet suffers service demand decline in Q1

Harare, (New Ziana) – Telecommunications giant, Econet Wireless said on Monday it suffered a drop in voice, data and SMS traffic volumes in the first quarter of 2020, which affected its financial performance for the period.

Voice, data and SMS services generate an estimated 80 percent of the
telco’s revenues.

Econet said the situation had been compounded by low tariffs which
lagged behind inflation.

“Voice, data and SMS traffic declined by 5.4 percent, 15.6 percent and
6.2 percent respectively on year-on-year basis,” Econet said in an
operations update.

The company noted that there was, however, an increase in data services
demand after the Covid-19 lockdown that has seen some companies
allowing their employees to work from home.

The improvement is likely to be reflected in the firm’s second quarter
performance.

Econet said the current tariffs, were not cost reflective and continued
to put pressure on the company as operating expenses were on the rise.
“The company together with the other players in the industry continues
to engage with the regulator to implement tariffs that sustain the
viability of the sector as well as ensure that a high quality of
service standard is maintained,” Econet said.

“The local cost of providing our services is increasing in line with
market trends, where the alternative market is used for reference
pricing.”

Econet said it was targeting to reduce its operating costs by 20
percent and had since called on its suppliers to reduce their prices
in line with declining demand for services on the back of a general
decline in the economy.

“The operating environment remains very volatile and uncertain,” the
company said.

“We anticipate that the depressed demand in the wake of the Covid-19
pandemic, depreciating local currency and hyperinflation will continue
in the short term.”
New Ziana

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