Econet Wireless Zimbabwe Limited (Econet) is the largest mobile operator in Zimbabwe, providing mobile, fixed line, internet, and payment services. It has over 9 million mobile subscribers out of Zimbabwe's total of 16 million. Econet acquired Vimpelcom in 2014 to expand into other African countries. It also has a majority stake in Steward Bank and acquired TN Medical, now Steward Health. For 2014, Econet recorded $752.7 million in revenue, with voice services as the largest component and Ecocash payment services contributing to 14% of growth. Econet launched one of Africa's first LTE networks and has been decreasing its debt-to-equity ratio through repaying debts

1. Econet Wireless Zimbabwe
Limited (Econet) is a Zimba-
bwe - based provider of Tele-
communications services,
providing solutions in mobile
and fixed telephony, Internet
access and payment solutions.
Its range of services compris-
es: Buddie, Econet Premium,
Econet Broadband, EcoCash
and Econet Solar.
In October 2014, Econet has
acquired Vimpelcom, a Rus-
sian Global Telecom operator
in the Eastern and Central Af-
rican countries. It has majority
shareholding in Steward bank
(previously TN Bank), and
concluded a deal in march
2014 of the full acquisition of
TN Medical, now Steward
Health.
Zimbabwe has more than 16
millions mobile subscribers
which over 9 millions are
Econet’s, making it the largest
mobile operator in the coun-
try. Its competitors are Telecel
Zimbabwe and NetOne.
The company recorded a reve-
nue of US$ 752,7 Million for
the year 2014. The biggest
component of the revenue is
the Econet (Or Voice ser-
vices), although the Ecocash,
Econet Wireless Zimbabwe Ltd (ECO.zw)
By Frank KAHUMBA
Research Analyst
OVERALL
 Share Price (US cents) 51.00
 Beta: 1.07
 Market Cap (USD Mil.): $481.94
 Shares Outstanding (Mil.): 909.32
 Dividend: 0.61
 Yield (%): 2.37
FINANCIALS
ECO.ZI Industry Sector
 P/E 6.37 28.75 20.40
 EPS 8.00 — —
 ROI: 11.14 9.25 18.02
 ROE: 16.06 24.84 20.99
PEOPLE
 James Myers Non - Executive Chairman
 Douglas Mboweni C.E.O, Executive Director
 Krison Chirairo Financial Director
 Kezito Makuni Technical Director
 James Museba Chief Information Officer
contribute to 14% of the reve-
nue, is the driving force be-
hind the revenue growth. This
has allow Econet to amelio-
rate its Debt to Equity ratio,
from 45% in August 2013 to
37% in August 2014, by cur-
rently repaying US$ 228 Mil-
lion in debts.
The Financial indicators sum-
mary, presented above the
text, comes from the Zimba-
bwe stock Exchange for the
Econet and Reuters for the
Industry and sector. The P/E
suggest that Econet might be a
‘Diamond in the rough”.
When it comes to efficiency in
using its Assets, Econet seems
moderately doing good. Its
level of debts decreasing,
thanks to its growth return,
might considerably improve
ROE and ROI.
There has been a constant de-
crease in net profit margin
over the last 5 years, from
31% in 2010 to 16% in 2014.
This might be the result of the
aggressive expansion that the
company is pursuing in net-
work and computer cost to
increase coverage and invest-
ment in more sophisticated
billing system, as the compa-
ny’s investors report suggest.
Econet launched one of the
first in Africa Long Term
Evolution (LTE) networks.
Steward Bank has decrease its
loss from US$ 22 Million to
US$ 3.7 Million profit and
Not - Interest Income to US$
7,5 Million from Loss of US$
3,9 Million, putting the bank
as an important component in
diversification of the source of
Income
Given its Beta coefficient,
Econet is, despite its diversifi-
cation in operations, more
volatile than its market, giving
a good rate of return to the
investor, should he/she be
comfortable with the level of
risk associated. The Company
still reckons that Broadband
and overlay services remain
the growth drivers of the com-
pany’s revenue.
My recommendation would be
to buy the stock, with caution,
given the country fragile eco-
nomic outlook, with GDP
growth rate 3.7%, policy in-
consistency (Multi - curren-
cy), funding constraints, cor-
ruption, inefficiency of Gov-
ernment bureaucracy and in-
adequate infrastructure.