PowerTel makes $20.2m revenue in 2012, targets consumer market

We just attended a press briefing by government owned internet provider, PowerTel, where the company’s board chairman, Francis Chirimuuta, announced the company’s 2012 financial performance and general strategy for the 2013 and beyond. Chirimuuta said at the briefing that the company has performed quite outstandingly for a government run operation. They are a subsidiary of the national power company ZESA Holdings.

PowerTel in 2012 made a total US $20.2 million in revenue, a change from $16.4 million  the previous year. The company’s profit before tax rose significantly by about 620% from $428,000 in 2011 to 3.1 million in 2012. The improved results, Chirimuuta said, are a result of a deliberate turn around that the company embarked on at the beginning on 2012.

Here are some of the other things the PowerTel spoke about:

• The company is looking at growing the revenue to $32m in 2013 and to about $100m in 2016
• PowerTel invested $8m in the business in 2012 and intends to invest close to $30m this year.
• PowerTel relies mainly on its own funds and strategic alliances to expand its network and introduce new products.
• The company’s fibre network is now 5,000km, making it one of the largest fibre networks in the country. PowerTel has Point of Presence points in all the major cities and towns except Chegutu, Banket, Karoyi, Kariba, Chirundu, Nyanga, Triangle and Chiredzi. (see map below supplied by PowerTel).
• Chirimuuta says this network makes them the 4^th largest data network in Zimbabwe in terms network coverage.
• The PowerTel team couldn’t be drawn to say how many subscribers their mobile broadband service now has an indication the number is still too low to show.
• PowerTel would like to focus on growing its consumer business and corporate, a move from mostly selling wholesale internet to internet providers and big corporate buyers.
• In this regard PowerTel is looking to converged fixed and mobile services and says they have a vast array of converged products on the way.
• The company’s billing system will be arriving ‘soon’ and this will allow PowerTel to bill customers more effectively. Currently PowerTel charges mobile broadband users a flat $50 monthly. The billing system, Chirimuuta said, will mean customers can buy recharge cards.
• PowerTel will be introducing its own shops in the country in addition to the ZESA banking hall distribution points for their products. One shop is already open in Bulawayo and another will be opened in Harare soon. They will also establish dealerships and franchisees soon.
• On the new converged licensing regime that’s being talked about, Chirimuuta said as an IAP Class A licensee, they are already in many ways a converged licensee. He said however they have sought clarification from POTRAZ on how the new licenses will be structured.  He added that they anticipate POTRAZ to put in place a categorised converged licensing structure. PowerTel s license is expiring in 2014.

The briefing was also attended by Dennis Magaya who was introduced as the company’s business strategy consultant. Magaya is the founder and CEO of RubieM Technologies, a company that provides telecoms technical and strategic consultancy in southern Africa.