Telecel sees overlay services contributing 50 pct of revenue by FY17

Telecel sees overlay services contributing 50 pct of revenue by FY17

By Bernard Mpofu, HARARE, July 9 (The Source) – The local unit of VimpelCom, Telecel Zimbabwe, sees data and overlay services contributing half of revenues within the next two years driven by a gradual growth in smartphone penetration, new chief executive officer Angeline Vere told The Source.

Vere said a reduction in the contribution of voice calls to total revenue has not been rapid despite growth in mobile penetration rising from less than 30 percent in 2009 to around 106 percent currently.

“Where you had 100 percent voice in 2010, this has started going down with the introduction of smart phones. Now our mix is about 70/30 but we are looking at it going the other way. Say 50/50 within the next two years,” Vere said in an interview.

“The issue is about smart phone penetration in Zimbabwe, which at the moment is about 20-25 percent. So for as long as the smart phone penetration is not high, we do not anticipate an immediate decrease in voice.”

At listed rival telecoms firm Econet Wireless, overlay services added $72,7 million to revenue in the year to February, a growth of 64.9 percent on the prior year’s contribution while mobile broadband weighed in with $103 million, an increase of 42.3 percent to help offset the fall in voice revenue.

Econet’s  after-tax profit for the year was $70,2 million, down from $119,4 million in 2014, although revenue levels largely held at $746,2 million, nearly one percent lower than $752,7 million previously.

Telecel is Zimbabwe’s third biggest mobile operator with 2,4 million subscribers.

Amsterdam-headquartered communications firm VimpelCom owns 60 percent of the firm, with the remaining 40 percent being controlled by Empowerment Corporation (EC), a local consortium.

Experts say a recent duty on mobile phone imports and other electronic gadgets could also reduce growth of smart phone penetration despite a nationwide craze.

Last week, Telecel, which is currently embroiled in a legal battle with government over the cancellation of its operating licence, said it had paid a $5 million June installment as part of the $137,5 million for its licence.

On Tuesday night, Vere said discussions to reclaim its licence were proceeding “amicably.”