Zimbabwe’s telecommunication sector is currently facing an investment crisis due to foreign currency shortages, an official has said
Addressing a Parliamentary Portfolio no Information Communication Technology at a tour of Econet, Econet Wireless Group Chief Finance Officer Roy Chimanikire said the country’s telecommunications industry was not growing due to forex shortage and it’s service provision was falling.
“In the earlier years we were much higher because we were catching up, we came into line with general industry average but now we have fallen behind and we continue to fall behind every single year. When we look at the financial year which we closed last month, we were virtually on zero, virtually no investment whatsoever during the course of the year and that is because of the foreign currency shortage and it has been declining,” Chimamikire said
“This is not just an Econet problem it is the whole sector that is affected.
“We have spoken to our colleagues and I believe that at least we have had the earlier part of the investment where we raised a lot of money, this is not the same for the other operators within the environment so we have got a huge investment gap that we are creating and every year it is growing,” Chimanikire said.
Econet, the country’s largest mobile operator in terms of both subscriber base and capiciatation has not invested anything this in recent years.
“The moment you start to fall behind, for you to catch up becomes a monumental task.This year we have invested virtually nothing, we needed about USD260 million. When you look at our exchange rates now, you are looking at about 600 million RTGS dollars that we needed to invest into the network this year alone,” he said.
Chimanikire said a lot of the money that they make goes back into the business through investment.
“What we do in our industry is, there are benchmarks that we look at and we say what is the level of investment that must be made into sustaining this infrastructure.
“I know when people look, they say these guys are making a lot of money but in reality a lot of that goes back into reinvestment into the business.
“So generally the benchmark is that you are investing about 20 percent of your total revenue back into the network,” he said.
He said once experienced foreign currency shortages which resulted in lack of investment.
“We went through hyperinflation from 1998 and it ended in 2008, what it meant is that we were not able to invest.
“There was no foreign currency at all to allow investments. Basically for 10 years, we have done more in the last eight or nine years now compared to what we did in those 10 years of hyperinflation.
“When we started in 2008, we had less than a million subscribers and now we are tenfold that number as we talk now.
“What happened subsequent to that is we went and raised a lot of capital between 2009 and 2012, we went and we raised up to 500 million in facilities externally and we were able to capacitate the network.
“We invested close to $1.5 billion into our network and this is real US dollars,” he said.