By Jonathan Mbiriyamveka
Mobile giant NetOne Cellular (Private) Limited’s concerted efforts to drive the digital transformation strategy led to data contributing 51% of the total revenue.
During the 2021 financial year, business witnessed growth in both revenue and subscribers.
Revenue grew by 263% from ZWL4.145 billion in 2020 to ZWL15.036 billion in 2021, inflation adjusted revenue showed a growth of 96%.
Active subscribers closed off the year at 4,470,592 showing a net growth of 779,278 subscribers in a single year from the 2020 closing base of 3,691,314 subscribers.
As a result, NetOne subscriber market share grew significantly from 28.0% in 2020 to 31.4% in 2021.
During the period under review, Board Chairman Miss Susan Mutangadura, said the Company witnessed growth in revenues and customers who subscribed to NetOne Mobile Financial Services (MFS).
“Stringent measures were put in place to ensure that the services offered under MFS were in compliance with the legal requirements and the directives issued by the Financial Intelligence Unit of the Reserve bank of Zimbabwe from time to time,” she said.
“Revenue for the year grew by 96% to ZWL18.6 billion from ZWL 9.5 billion in the prior year.
“Overheads grew by 46% with the major cost drivers being network, staff and marketing costs.
“Earnings Before Interest and Tax (EBITDA) was ZWL9 billion up from ZWL3.2 billion in prior year. A healthy EBITDA margin of 48% was recorded. The Company continued to be weighed down by the huge exchange losses on the foreign loans leading the Company to a loss making position.”
Capital expenditure was ZWL1 billion, mainly driven by the NMBB Phase III network expansion project.
“The Company continued to face challenges in accessing foreign currency, given that the greater part of operating costs for a mobile telecommunications company are paid in USD, with vendors for equipment and systems used to run the network demanding payment in foreign currency.
“The situation was exacerbated by the power challenges experienced during the period under review which compelled the business to consider alternative sources of power.
“Reliance was placed on diesel generators with fuel being procured largely in USD to power base stations,” she said.
However, she said the company commends the Government of Zimbabwe on the establishment of the foreign exchange auction market.
“This enabled the business to source the much needed foreign currency that was required to pay vendors for the supply of equipment, maintenance and support service fees as well as fuel.
“The Company continued to lobby for allocation of more foreign currency required for the business to meet its foreign obligations and for delivery of the latest technology to enable the business to offer customers world class services,” Miss Mutangadura said.
She said the company carried legacy loans that were inherited following the unbundling of the Postal and Telecommunications Corporation in 2000.
Accounting for these USD denominated loans negatively affected the Company’s balance sheet.
“This is exacerbated by the impact of foreign exchange losses. The line Ministry, the Ministry of Information Communication Technology, Postal and Courier Services has provided tremendous support in the efforts by NetOne to warehouse these legacy loans,” she said.
About Author
