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Expansion roll-out to continue, says Econet
Lungile Zulu, The Standard (Zimbabwe)
August 19, 2007

BULAWAYO - Zimbabwe's largest telecommunications company, Econet Wireless, says its expansion projects meant to increase its subscriber base will continue despite congestion problems attributed to low tariffs since they were slashed in line with the government price blitz.

Network problems have been further affected by power cuts experienced in the country despite efforts to install diesel generators to minimize the impact of load-shedding by the Zimbabwe Electricity Supply Authority (Zesa), says Econet.

Econet Wireless said prolonged power cuts disrupted cellular coverage, a situation that is threatening the availability of service, and is now a major contributor to calls failing to go through between networks.

Douglas Mboweni, Econet CEO, said the company is going ahead with work started a few months ago to add capacity to the network and increase its subscriber carrying capacity from the current 800 000 to 1.2 million by February 2008.

"The Econet board of directors has directed that there should be no suspension of the work to increase capacity even though the network is experiencing severe congestion due to low tariffs," Mboweni said.

"Our board's view is that we maintain a long-term approach to Zimbabwe despite the current problems of low tariffs which are causing congestion and power cuts."

Econet Wireless early this year signed two contracts with Ericsson of Sweden and ZTE of China to supply equipment for the expansion project with Ericsson expanding the core network which is made up of the switching systems, whilst ZTE is supplying radio base stations for the southern part of the country.

Meanwhile, Econet Wireless says future dividends will now include shares as payment instead of cash. Econet reports twice a year, in February and August, and generally pays a dividend to its shareholders when it releases its results.

Econet said this is meant to help shareholders protect the value of their money owing to the hyper inflationary environment and also to protect the company to conserve cash during its current expansion programmes.

Mboweni said that the company is introducing scrip payments on future dividends for the first time to help shareholders mitigate against hyper-inflation.

"At the end of each reporting period by the time shareholders actually get their cash it would have lost considerable value because of hyper-inflation hence the need to produce results at the end of each reporting period.

"The payment of dividends is based in the results, and the board only makes such payments having considered all the issues including the operating environment," Mboweni said.

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