Today, NetOne announced its annual financial results which revealed that they made a $2.7 million loss in 2016. This was an increase from the $2.6 million loss of the previous year.
The losses are due to interest from legacy debts that they acquired when they got loans from China Eximbank. NetOne has also been fined by Zimbabwe Revenue Authority (ZIMRA) and the State Procurement Board (PSB) which contributes to the loss. In a given month, the company is spending more than $400 000 on diesel for power station, these high operating costs also made the company take a loss.
Besides the loss, NetOne also reported some good news. The company made around $114 million last year which is an increase from $113 million of the previous year and it is also the highest revenue in 5 years. The rapid growth can be attributed to their new Internet bundle OneFusion which gives users access to social media, SMS, Internet and Voice.
The bundle has managed to draw users from other networks as it offers good value for money being spent. Econet and Telecel reported to have lost 300 000 and 100 000 subscribers respectively. The subscribers that these two mobile operators didn’t all go to NetOne but you can bet that OneFusion had a part to play in that migration.
Overall the telecommunications industry had a 21% revenue decline from $1.4 billion in 2015 to $1.1 billion in 2016. The decline in revenue is due to platforms like WhatsApp and Twitter which are now making most of the revenue contribution but not really increasing the revenue. NetOne is also reported to be the only company that made revenue growth last year.
The mobile operator plans to keep growing its subscribers and product offerings through a $218 million investment for network expansion. NetOne may also be working on bringing services like mobile financial services.
7 comments
In business the bottom-line is profit. Revenue growth is great news on the back of profit. When in a loss-making scenario you can’t play that down. If NetOne can somehow remove the manacles tying it to this govt, performance might improve ALL ROUND. Like in soccer, money comes from scoring NOT entertainment value.
The top-line/revenue grew by 1% and bottom-line/profit worsened by 4% is what these guys are shouting home about.The revenue increase is really marginal to say the least Until Netone reports a profit then there will be justification for them to celebrate. Everyone is aware these guys did not pay license fee to POTRAZ which Econet did but also operating in the same environment. Whats is their projection in trms of profitability so that the shareholder can start to enjoy a dividend? I see another clean-up of management as results are unlikely to improve under the current economic environment
A loss of 2,7 million from $2,6 million from the previous year…..seems no profit to be realised anytime soon.
Last year there were reports that one wallet was recording very low subscriber numbers. Don’t see if this will change even if they offer mobile money services. The operating environment has been quite favourable to net one but alas there are still operating at a loss, managers have been sent home over and above that the company is not paying any licence fees or if true have made a payment plan to that regard. In business success is measured by profits and high social responsibility. Net one is still far from rejoicing.
The sole objective of any business is profit, no need to go loud when an entity is operating at a loss. Maybe netone needs to offer realistic promotions and not just chase after customers. Imagine if it had no leverage on government back up. I believe we could be talking of another csc or nrz.
Legacy debts seem to be the talk of the town this reporting season.Telone legacy debts….Netone legacy debts…..The effects of One fusion are yet to be felt in the market
It’s a pity econet has to be the only complying MNO and the playing ground being unlevel as it is, the company has remained resilient. Lets all celebrate when we have figures showing profits and not the other way round. Maybe the growth in numbers is just a reflection of people flocking for cheap things with no much value addition in terms of revenue.