This comes after the group reported a loss of $988.24 million from a profit of $123.55 million last year. The group no doubt faced a myriad of challenges in an environment where hyperinflation had affected customers negatively as purchasing power declined. Consequently, this affected the viability of the business.
In a somewhat vague third quarter to November 2019 update, the group says that the financial performance was in line with the performance at the interim stage. Market share had grown driven by volume growth in voice minutes, data and SMS traffic. Customer market share is around 70%.
Voice traffic was up 20% in the quarter against the comparable year ago period, Data was up 26% and SMS grew 7%. Econet bemoaned the low tariffs, which it noted continued to lag behind inflation. "Given the rapid local currency depreciation since February 2019, the tariffs are now at sub-economic levels."
The group said it would engage POTRAZ in an effort to go back to a tariff regime that ensures continued viability of the sector and to ensure the quality of service standards are maintained.
In the period, traffic volumes declined from the previous quarter following the tariff adjustments in August and October. Voice was down 8% from the second quarter, Data was 30% lower and SMS dropped 35%.
"The business continues to customise consumer packages to maintain affordability in light of the depressed consumer disposable incomes while pricing within the confines of responsible business practice."
In terms of operations, the group said erratic grid power supply and escalating fuel costs had significantly impacted base station running costs. However, deployment of solar equipment and hybrid batteries across base stations and switching centres is now at an advanced stage.
The group said the depreciation of the local currency is expected to negatively impact the financial performance. But the group insists that the investment in Liquid Telecom Holdings more than offsets exposure to foreign currency vendor obligations resulting in a net positive foreign currency asset position.
