#MondayBlues: NetOne Must Perform Better, After $218m Loan

NetOne for the past 20 years has been operating without any capital investment from its shareholder, government which had allowed it to function independently, like a private player since the disbandment from the PTC era, before receiving the China Eximbank, $218million Huawei loan.

Their latest financial results could be better since this is their first full year after funding, alas their revenue growth does not reflect much of the investment plowed in.

After recording almost a double in subscriber base from 2 million in 2016 to 4. 8million subscribers in 2017, their revenue increase by only $1 million is so paltry and brings the  sector performance report to question.

netone team launching OneFi

NetOne by no doubt is Zimbabwe’s fastest growing mobile network and hundreds of thousands are  making it their first line of choice against the traditional leading players Econet Wireless and Telecel, at the back drop of innovative products and expanding network.

The Average Revenue Per User (ARPU) in Zimbabwe is $1 dollar, meaning an active subscriber will at least use a dollar every three months, with their new 4 million subscribers, their revenue increase should be expected to be more than $1million, and their $115million revenue jump  for 2016 from $114m before investiment is small. 

One fusion has got many topping at least $5 a month while most young executives and internet addicts are accustomed to at least $10 a month, this alone technically pushed their ARPU way above $2 for the active community but still, their figures could be better.

This has got nothing to do with legacy issues or other debts they inherited from the old Kangai management or PTC era. The revenue increase is independent of profit margins and lack of such a reflection needs more clarity.

This probably brings us to the same question on how the quarterly Telecommunications report is compiled?

If they are errors in this quarterly report how much more information is not accurate?

Last year Potraz had announced that it is introducing a quality of service system to analyze data from the operators’ side and will be able to even protect consumers from it system against call drops, disappearing airtime and the like.

While it’s expected of it to be less profitable, the revenue increase of only $1million against 4 million active subscribers is worrisome and brings the figures to the test.

Historically, the Posts and Telecommunication Corporation (PTC) disbandment gave birth to TelOne, a fixed mobile operator, Zimpost the postal service provider and NetOne the mobile network operator.

NetOne Agent

The government, which is the owner never invested in the mobile network , making NetOne operate like any other SME , to sustain its operation, against major investment from its competitors, Telecel and Econet which came years later.

For NetOne to survive all these years, it was nothing short of  a miracle, as their giant competitors were pouring in large investment to boost their operations and increase infrastructure with wider network coverage.

The only Capex which NetOne received was the first batch from the Huawei deal which was structured by the past administration, after years of fighting with the local State Procurement Board which had its own preferred individuals to undertake control.

The second significant boost was the Huawei –NetOne deal, which in History is the only significant investment they have ever received.

NetOne has now better ground to operate and compete against other players and more is required of them since they are now even and capacitated like any other mobile operator.

Also not to mention that their major competitor Telecel was technically killed out of the race to their advantage after shutdown fears and government acquisition which preceded. NetOne  and Telecel are now sharing infrastructure for better connectivity which is an advantage against Econet.

Before Kangai was fired, he announced that NetOne had installed freshbase stations totalling to 148, including 2G and 3g , right at the beginning of the year, meaning they have a more wider network than before to collect new revenue, unless this was of course a publicity stunt.

If this was a fact, sure more is demanded of NetOne which is now much more capacitated than ever and has potential to become Zimbabwe’s biggest mobile network. To whom much is given, much is required!

#ZimStartups: Harare Facebook Developers Form Online Community

Previous article

Herald To Launch Business Weekly Tonight!

Next article

Comments

Leave a reply

Your email address will not be published. Required fields are marked *