Econet Wireless Diversifies Into Road Construction
Econet Wireless Zimbabwe, a mobile and fixed telephony services provider, said it is diversifying into road construction in a bid to improve communication channels and to support the community. CEO Douglas Mboweni said that many communities are hard to reach because of poor roads and that diversification into road construction would increase the size of the company’s footprint, help the development of social infrastructure and support the country’s economic plan, the Zimbabwe Agenda for Sustainable Social Transformation (ZimAsset). Mboweni added that the group has already begun the process of upgrading roads and that it will intensify its efforts, particularly in rural areas.
As we have been reporting, many operators around the world are diversifying, mainly due to diminishing ARPU from traditional telephony services in an era of saturation. However, in sub-Saharan Africa, telephony is still on the rise, and providers are in a position of advantage. In fact, mobile services in particular are taking on some of the roles that in other markets are played by other kinds of entities, such as banks. In the case of Econet in Zimbabwe, diversification appears to be a strategy aimed at promoting fixed and mobile services themselves. Strengthening physical infrastructure, the operator believes, will help strengthen telecommunications infrastructure—presumably by making it easier for cable to be laid and cell towers constructed in relatively remote areas, and we think this belief is most likely well-founded.
In addition, by extending its presence throughout the country by way of construction projects, Econet can gain the good will of the rural populace and raise its profile generally, which could result in an increase in its customer base. It should be noted that diversification is nothing new to Econet, which in 2012 and late 2013 acquired a controlling share of Steward Bank, a Zimbabwean retail bank, which is now a subsidiary of the operator and handles Econet’s m-payment system, Ecocash.
The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week : http://www.tarifica.com/storyoftheweek.aspx
The Tarifica Telecom Industry Research Department