Econet Results: Data and EcoCash revenues growing, overall revenue growth slows

Econet today released their financial results for the year ended February 2014. The results indicate that Econet Wireless posted $119.4 million profit which is definitely impressive, in an economy like ours.

Whilst overall key indicators like revenue showed weak growth, Data and EcoCash revenues were the most impressive indicators for Econet. As expected, data revenues grew 62% from $44.6 million in February last year to 72.4 million in February 2014.

It’s easy to look at the Facebook and WhatsApp bundles as the key drivers of data revenues but looking at the Half year results in August 2013 (before data bundles), data revenues were at 33.4 million, just under half the full year data revenues. If anything, their impact must have been minimal.

Instead, Econet points at that growth in internet penetration now at 42% as the chief reason for the high growth Data revenues.

With regards to EcoCash, the year on year growth has been phenomenal from $8.2 million in 2013 to 33.4 million in 2014, representing a 307% increase.  From HY August 2013 ($13 million) to HY February 2014 ($20.4 million), EcoCash revenues grew by around $7 million over the six month period. This can be attributed to EcoCashSave, EcoCash payroll and the wider recognition of EcoCash as a tool for financial inclusion.

“EcoCash has provided access to banking accounts to many people who were previously excluded from the financial system, and in doing so, has contributed about half of the national financial services penetration level of about 30%”, read Econet’s report.

The company says, “an excess of 4.2 million people, representing 53% of the adult population in
Zimbabwe, were impacted by EcoCash during the year”. Obviously 4.2 million does not necessarily mean the number of EcoCash subscribers but it wouldn’t come as a surprise if they have numbers that high.

On the whole, Econet’s revenue performance has been quite lethargic. Despite adding 782 000 subscribers, overall revenue growth has slowed growing a mere 8% from $695.8 million in February 2013 to $752.7 million for February 2014. The company is adding more subscribers who are not spending that much.

But to be fair on Econet, they have brought in great deals that have brought in great value to customer which consequently reduces a customer’s spend. And not that they are complaining, Econet is not immune to the Economic challenges currently facing Zimbabwe. Their response to these has been stellar so far.