By MacDonald Dzirutwe
HARARE (Reuters) - Econet Wireless, Zimbabwe's largest mobile phone operator, will spend $300 million this year to expand its voice and data services as it aims for more rapid growth, the company's chief executive said on Friday.
Douglas Mboweni also told Reuters in an interview that the Econet will continue to increase its subscriber numbers, helped by Zimbabwe's low mobile penetration rates.
"The bulk of investments will go into expanding our infrastructure for both data and voice," Mboweni said.
Telecom firms are keen to expand in fast-growing Africa, where mobile phone use still lags well behind more developed countries.
MTN, Africa's largest mobile phone company by subcribers, is currently in talks to buy assets from Egypt's Orascom Telecom. Indian firm Bharti Airtel recently acquired the African assets of Kuwaiti firm Zain.
Mboweni said that Econet, which competes with Orascom's Zimbabwe unit, will fund the improvements through a combination of loans, internal cash and vendor financing.
The company will also continue to add subscribers, as Zimbabwe's mobile penetration remains low at about 40 percent, he said. Econet currently has 4 million subscribers, or 73 percent of the market, up from 1.2 million last year.
Mboweni said the introduction of multi-currencies in 2009, following the formation of a unity government between President Robert Mugabe and his rival Morgan Tsvangirai, now prime minister, had helped Econet's operations.
Multi-currencies replaced the Zimbabwe dollar, which had been eroded by hyper-inflation that made business planning difficult.
Zimbabwe's economy grew for the first time in a decade last year but businesses still struggle to access credit from overseas. Econet, however, was able to secure foreign financing, because one of its major shareholders is a South Africa-based firm, Econet Wireless Group (EWG).
EWG runs mobile networks in Burundi, Lesotho, Botswana and is a minority shareholder in Kenya's Essar Group.
Econet is Zimbabwe's largest mobile operator by by both subscribers and revenue ahead of Telecel, the Orascom unit, and state-owned NetOne.
The company's earnings before interest, taxation, depreciation and armotisation (EBITDA) for the year ending February 2010 stood at $179 million. There were no comparative figures for 2009 when the country was using the Zimbabwe dollar.
Revenues jumped to $362.7 million, up from $87.9 million the previous year.
The company had the highest share price of $4.92 on the stock market on Friday, with a market capitalisation of $496.68 million.
"We believe that for as long as the penetration in Zimbabwe is below that of our regional peers, there is plenty of opportunity to get a healthy return from further investment," Mboweni said, adding that the Econet no immediate plans to seek foreign shareholding.
Mboweni said Econet, which is a majority shareholder in a large beverages company, would continue to review that investment and would divest when it can get a fair price.
Reuters Africa
