By Tawanda Musarurwa HARARE – Data usage accounted for a 4,7 percent rise in Zimbabwe’s mobile telecommunication firms’ combined revenues during the last quarter of 2015, the latest Postal and Tele- communications Regulatory Authority of Zimbabwe report shows. But over-the-top (OTT) data packages for WhatsApp and Facebook are still to claim a significant portion of mobile internet and data usage. The country has three mobile telecommunication opera- tors, namely Econet Zimba- bwe, Telecel Zimbabwe and NetOne. According to the ‘Zimba- bwe Post & Telecoms Sector Report Q4 2015’, total reve- nue for the three mobile tel- ecom companies increased by 4,7 percent to $191 million from $182,5 million recorded in the previous quarter, and generally out-did revenue performance in all previous quarters in 2015. POTRAZ attributed the growth in revenue to a rise mobile data usage during the quarter under review. The statistics show that mobile data utilisation increased News Update as @ 1530 hours, Thursday 17 March 2016 Feedback: [email protected]Email: [email protected]Data usage drives Telcos’ Q4 revenue growth
Transcript
By Tawanda Musarurwa
HARARE – Data usage accounted for a 4,7 percent rise in Zimbabwe’s mobile telecommunication firms’ combined revenues during the last quarter of 2015, the latest Postal and Tele-communications Regulatory Authority of Zimbabwe report shows.
But over-the-top (OTT) data packages for WhatsApp and Facebook are stil l to claim a significant portion of mobile internet and data usage. The country has three mobile telecommunication opera-tors, namely Econet Zimba-bwe, Telecel Zimbabwe and NetOne.
According to the ‘Zimba-bwe Post & Telecoms Sector Report Q4 2015’, total reve-nue for the three mobile tel-ecom companies increased by 4,7 percent to $191 million
from $182,5 million recorded in the previous quarter, and generally out-did revenue performance in all previous quarters in 2015.
POTRAZ attributed the growth in revenue to a rise mobile data usage during the quarter under review. The statistics show that mobile data util isation increased
News Update as @ 1530 hours, Thursday 17 March 2016
by 27,4 percent to record 1 203 378 839 megabytes (MB) from 944 268 192MB recorded in the previous quarter.
OTT data packages for WhatsApp and Facebook contributed 34 percent and 3 percent respectively to total mobile internet and data usage, while the balance (63 percent) was indicated as ‘other data usage.’
This data comes on the back of recent statements by ICT, postal and Courier Services Minister Supa Mandiwanzira that his Minsitry had turned down suggestions by the tel-cos to ban OTT services.
In terms of internet and data util isation Econet had 79,5 percent market share, while Telecel and NetOne had 7,1 percent and 13,4 percent respectively. And in respect of revenues, Econet also dominated market share at 70,2 percent, while NetOne and Telecel had 18,3 percent and 11,5 percent, respec-
tively.
But during the period under review, it was only NetOne that gained in overall market share by 1,3 percent. Econet and Telecel lost market share by 0,7 percent and 0,6 per-cent, respectively. At $191 million, the fourth quarter had the highest revenue of all the quarters last year, up from $182,5 million in the third quarter. The first and second quarters had recorded revenues of $188,5 million and $183,1 million, respec-tively.
Mobile/Internet Penetra-tion Continues On The Up
The POTRAZ report also showed that the country’s mobile penetration rate increased to 95,4 percent in the fourth quarter from 92,8 percent previously.
NetOne recorded the high-est growth posting an 8,8 percent increase in active subscribers to a total of 4,134 million active users,
while Econet remains domi-nant with 6,7 million active subscribers. Telecel comes in third with 1,9 million active subscribers. Zimbabwe’s internet penetration rate also increased, improving by 1,5 percent from 46,6 percent in the third quarter to 48,1 percent in December 2015. This was after active internet subscriptions rose 8 per-cent during the period under review to 6 575 591 from 6 086 827 subscriptions in the previous quarter.
Mobile internet made up 95,6 percentof total internet sub-scriptions. LTE registered the highest increase in subscrip-tions. This is attributed to the increase in LTE access as Econet and NetOne are roll-ing out LTE base stations.
“Leased lines, dial up, WiMAX and CDMA technologies reg-istered declines in subscrip-tions as corporates and some households are changing to other technologies like fibre and ADSL,” said POTRAZ.●
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BH24 Reporter
HARARE -Plastic products manufacturer Proplastics has reported a 35 percent jump in after-tax profit to $652 381 for the year ended December 31, 2015.
The improvement in profita-bility was driven by revenue growth of 6 percent to $14,1 million.
“Driven by volume growth, an expansion in gross for most of the products (itself a function of improved manufacturing efficiency and better sourcing of raw materials), as well as lower
funding costs for the group on the back of negotiating favourable rates on borrow-ings,” said the company in a statement accompanying the results.
Gross profit was up 15 per-cent to $3,2 million as gross profit margin improved to 23 percent from 21 percent in the prior comparable period.
But overheads rose 16
percent attributable to the once-off costs of the unbun-dling exercise from Masimba Holdings, said management.
EBIDTA grew by 20 percent to $1,7 million, while finance costs were 21 percent down from prior year. Profit before tax grew by 28 percent to 4832 425. The company’s board has proposed a final dividend of 0.15 cents for the period just ended.
Management said the deci-sion to declare a dividend was supported by the busi-ness’ profitability and ability to generate cash.●
Proplastics’ after-tax profit jumps 35pc
BH246
BH247
BH24 Reporter
HARARE– Zimbabwe received the Best Destina-tion for adventure Award from the Pacific Area Travel Writers Association (PATWA) at the just ended Interna-tional Tourism Bourse (ITB) which took place in Berlin, Germany.
The Pacific Area Travel Writ-ers Association (PATWA) is a professional organisation of travel writers which was founded in 1998, in Colombo, Sri Lanka with India as its base.
The Award was presented to the Minister of Tourism and Hospitality Industry Engineer Walter Mzembi at an award ceremony officiated by the UNWTO Secretary General Dr Talib Rifai on the sidelines of ITB 2016.
Bestowing of this achiever tourism destination status by PATWA affirms the evi-
dent interest in Zimbabwe’s tourism offering as witnessed during the ITB tourism fair.
The award distinguishes the country’s tourism vibrancy despite the challenges the industry continues to face in adequately executing desti-nation promotion initiatives
in various markets around the world.
It comes at time the Ministry of Tourism and Hospitality Industry is championing an all-encompassing national brand so as to fully realise the country’s tourism, invest-ment and trade potential.●
HARARE – Sibanye Gold Ltd is set to take over Aquarius Platinum – and subsequently its shareholding in the Zvishavane-based Mimosa Platinum – after the South African Competition Com-mission and the Commission Tribunal approved the trans-action.
Sinbanye is South Africa’s largest gold producer.
Aquarius announced the approval today:“These approvals were the final reg-ulatory approvals required for the transaction, which was approved by Aquarius shareholders in January, to proceed.
‘Aquarius and Sibanye are now in the process of con-firming the Conditions Fulfil-ment Date.
“Once the Conditions Fulfil-ment Date has been con-firmed, Aquarius will release
an updated timetable of events leading up to comple-tion of the transaction and payment to Aquarius share-holders,” said Aquarius.
In October last year, Sibanye agreed to buy Aquarius Plati-
num for $294 million.
Mimosa Platinum was Aquar-ius’ 50-50 joint venture with Impala Platinum, and is one of the most cost efficient and safest platinum group metals (PGM) producers in Zimba-bwe.●
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Sibanye Gold’s Mimosa take-over nears
BH2412
BH2413
HARARE - The equities market waded into negative territory in today’s trades, bucking gains over the two previous trading sessions as the mainstream industrial index lost 0,19 to close at 99.79.
Dragging down the index was cigarette producer BAT which shed $0,2500 to close at $10,7500 while milk processor Dairibord $0,0010 to trade at $0,06800 after the company reported a 19 percent increase in volumes and a 4 percent growth in revenue for the year ended
December 31, 2015. And telecoms giant Econet also eased $0,0010 to trade
at $0,2310.
On the upside, ART Corpo-ration gained a signif icant $0,0020 to close at $0,0120, while Padenga rose $0,0006 to $0,0606 and Meikles went up $0,0004 to close at $0,0704.
The mining index was flat at 19.22 as Bindura, Fal-gold, Hwange and RioZim maintained previous price levels at $0,0096, $0,0050, $0,0300 and $0,1040 respectively
The black arrow indicate level of load shedding across the country.
POwER GENERATION sTATs
Gen Station
17 March 2016
Energy
(Megawatts)
Hwange 308 MW
kariba 468 MW
Harare 30 MW
Munyati 0 MW
Bulawayo 0 MW
Imports 0 - 400 MW
Total 1020 Mw
• Thursday 24 March 2016 - Annual General Meeting of Willdale Limited; Place: Boardroom, Willdale Administration Block, 19.5km peg Lomagundi Road, Mount Hampden; Time: 1100 hours...
• Analyst briefing - Old Mutual Zimbabwe, Steward Room, Meikles Hotel, March 30, 1430hrs
THE BH24 DIARy
JOHANNEsBURG - South Afri-ca's rand fell early today after claims that the Gupta family with close ties to President Jacob Zuma may have been behind his decision to sack the coun-try's respected finance minister Nhlanhla Nene in December.
The opposition called for the resignation of Zuma after Deputy Finance Minister Mcebisi Jonas said late on Wednesday the Gupta family had offered him Nene's job but that he had rejected it immediately on the grounds that such a move vio-lated South Africa's democracy.
At 0657 GMT the rand had slipped 0,64 percent to 15,7400 per dollar, reversing gains triggered by the United States central bank's decision to keep its lending rates unchanged.
Jonas' claims concerning the Guptas came just as a prolonged row between Finance Minister Pravin Gordhan and the elite Hawks police unit has raised concerns that the run on the rand and bonds seen in Decem-ber when Nene was fired could be repeated.
Earlier on Wednesday, the rand
had slipped to its weakest in more than two weeks over that stand-off.
Bonds were flat in early trade. The benchmark paper due 2026 still hovering around 2-week highs at 9,465 percent.
Gordhan's confrontation with the police and the claims by Jonas come in the same week that rating's agency Moody's was expected to be in the country to decide on whether to downgrade
the country's credit rating, which is two notches above "junk".
Investors fear further political uncertainty could hasten a down-grade, with Fitch and Standard & Poor's already rating the country just one step above subinvest-ment grade.
South Africa's Reserve Bank decides on interest rates at 1300 GMT, where is expected to keep rates on hold.
Zuma is due to answer questions in parliament on Thursday, and the ruling African National Con-gress (ANC) is holding a sched-uled meeting of its top brass this weekend at which the scandal will be discussed.
"The whale in the room is that the ANC could recall (remove) the president this weekend," said chief analyst at Rand Merchant Bank John Cairns in a note. - Reuters●
REGIONAl NEws 17
Rand dips over Gupta row on finmin job
As the mining industry strug-gles to respond to China’s economic shift, Rio Tinto Group named its top copper executive Jean-Sebastien Jacques as chief execu-tive officer to succeed Sam Walsh, who drove the pro-ducer’s iron ore expansion over the past decade.
Jacques will join the board of the world’s second-biggest mining company and Walsh will retire, London-based Rio said today in a statement. The 44-year-old Jacques completed negotiations in December for a $4,4 bill ion financing package to expand Mongolia’s Oyu Tolgoi mine as the company seeks to boost copper output with demand forecast to rise from about the end of the decade.
“Copper is the commodity that Rio is probably the most excited about, and they are chucking in the copper guy,” Mathew Hodge, an analyst at Morningstar Inc. in Sydney, said by phone. “Last time they made a transition, iron ore was the thing they were most excited about and they chucked in the iron ore guy.”
Walsh was appointed in January 2013 to replace Tom Albanese after the company was forced to take about $14 bill ion of write downs for failed deals in aluminum and coal.
The 66-year-old Australian led a concerted cost-cutting regime during his tenure, divesting assets and trim-ming project spending as prices of iron ore, its top earner, slumped from a 2011 peak.
Jacques, previously a group
strategy director for Tata Steel Group, takes charge of Rio’s portfolio in July amid the worst commodity price slump in a generation that’s eroded profits and forced competitors, includ-ing Glencore Plc and Anglo American Plc, to sell assets amid pressure from investors and credit ratings agen-cies to conserve cash. The Bloomberg Commodity Index of returns on about 22 raw materials tumbled in January to the lowest since 1991.
The biggest miners are also grappling with China’s shift from growth led by heavy industry to consumer-led expansion that’s seen as favoring metals includ-ing copper, used in cars to power grids and housing, and aluminum. Iron ore prices dropped to a six-year low in December.
“Some of his biggest chal-lenges are the things that Jacques is already dealing with,” said Brenton Saun-ders, a Sydney-based invest-ment analyst with BT Invest-ment Management Ltd., which manages about A$78
bill ion ($56 bill ion) of assets. They include the Oyu Tolgoi project, the Grasberg gold and copper mine in Indonesia and Rio’s coal portfolo, he said.
Rio rose 2,4 percent in Syd-ney trading Thursday, before the announcement was made, trimming its decline this year to 2,2 percent.
Walsh, whose contract had originally been due to end in December 2015, had his tenure extended in Octo-ber 2014, weeks after the company publicly rebuffed a merger approach from Glen-core. Jacques, who will have a base annual salary of 1,08 million pounds ($1,5 million) in his new role has “proven to be a standout performer as a leader in our business,” Walsh in a statement.
“Against the backdrop of a volatile economic environ-ment, Sam and his team have transformed the busi-ness,” Jacques said in the statement. “Sam leaves Rio Tinto as a much stronger company, with a bright future.” - Bloomberg●
INTERNATIONAl NEws 18
Rio Tinto appoints copper chief Jacques CEO to succeed walsh
Jean-Sebastien Jacques
By Tom Jackson
According to the African Development Bank (AfDB), as far back as 2011 there were already 313 million people – or 34 per cent of the continent’s total population – that could be referred to as middle class.
Yet at the same time, other par-ties see it differently. According to Standard Bank, only 15 mil-lion households in the 11 largest Sub-Saharan African economies fall into the bracket. Consul-tancy firm EIU Canback agrees there has been growth, but not as much as many think, sug-gesting that the African middle class rose to 6,2 percent of the continent’s population in 2014, up from 4,4 percent in 2004.
The disparities in estimates arise from differences in defin-ing what exactly “middle class” is. The AfDB defines it as people spending between $2 and $20 per day, and has a separate cat-egory for “stable middle class” – which it said stood at 123 million people in 2011. Income,
wealth, and consumption can all be used to establish class.
Yet despite the disparities in exactly how big it is, all observers – including the AfDB and Standard Bank – remain convinced Africa’s consumer market is burgeoning, and bringing with it increased oppor-tunities for businesses on the continent.
Investor George Soros says the growth of the continent’s middle class is one of the only eco-nomic bright spots across the world currently.
The size of the opportunity has not been lost on international companies. Accommodation booking platform Airbnb, which rents out rooms or whole prop-erties online, is scaling up its operations in the region, having already seen sizeable growth. It has more than doubled listings and seen user numbers increase by 145 per cent over the last year.
Airbnb is following a path already mapped out by taxi-hail-
ing giant Uber, which has rapidly established an African presence in eight cities – Cape Town, Durban, Johannesburg, Pretoria, Nairobi, Cairo, Casablanca and Lagos. Samantha Allenberg, communications associate for Africa at Uber, says the com-pany believes there is great potential given the growth of the continent’s middle class.
“We are changing the way peo-ple think about getting around, we are changing the way people connect with the people in their cities. In Africa we have part-nered with a significant number of drivers and provided them with the tools to build their own small businesses. We have ena-bled thousands of work opportu-nities across Africa and believe we can enable thousands more in the coming years,” she said.
This international interest in Africa is only set to increase as the middle class – however we define it – continues to grow. The AfDB says there will be 1,1 billion middle class Africans by 2060, while the Mckinsey
Global Institute thinks African consumer spending will hit $1,4 trillion by as soon as 2020.
Angel investor Eric Osiakwan said this continuing growth offers international companies a market that was previously very small, and where before they would have had to scale much faster.
“The middle class has an unquenchable taste for tech-nology innovation but we have seen this now at the bottom of the pyramid markets especially, because in their case it is pro-viding a livelihood,” he said.
“So as technology lifts people out of poverty into the middle class we would see an expan-sion that pulls in a level of momentum that would generate a tipping point effect some-where in the 21st century.”
What the middle class really wants
It is not just large interna-tional companies that are set to benefit from the growth of
19 analysis19 ANAlysIs
Africa’s rising middle class – and why it matters
20 analysis20 ANAlysIs
the continent’s middle class. Arielle Sandor is chief executive officer of kenyan jobs platform Duma Works, and says it has opened up new opportunities for smaller, more local businesses too.
“The growth of the middle class signifies that more people will have enough money to begin building personal businesses,” she said.
“When they do this, Duma Works wants to be there for them when they need to find talent to support this growing business.”
Youth – and media consump-tion – are key to this segment. Young Africans – in many African countries more than half the population is under the age of 25 – are increasingly online. Internet penetration on the con-tinent has increased by 6,839 per cent in the last 15 years, with Frost & Sullivan saying mobile penetration in the region will increase to 79 per cent by 2020.
But what do these consumers
want? Sandor says middle class consumers typically have higher standards for services they are using.
“This is because they have increased exposure to many options, rather than relying on the most broadcasted company that holds a monopoly in a given sector,” she said.
Johann Jenson, CEO of accom-modation marketplace SleepOut.com, agrees with Sandor that customer service has become especially key as the middle class grows and competition for its attention increases.
“Modern African consumers are still not as demanding as what you might find in other econo-mies such as the US or Europe, but there is a noticeable trend towards higher service levels given the multiple channels consumers now have to voice their discontent or satisfaction,” he said.
For Osiakwan, the middle class is looking for appropriate technology to save them time on “mundane stuff”, something
services like Uber, Airbnb and SleepOut can certainly claim to do.
In an African business climate where many companies have traditionally relied on newspa-pers or billboards to advertise to potential customers, does the rise of a younger, more affluent middle class change things? The answer is almost certainly yes, but the change is slow, and as yet inefficient and ineffective.
While the vast majority of mid-dle class consumers operate in the digital space, many African marketers are still using mass approaches in offline media. Yet change is being driven by both multinationals and smaller, young businesses targeting the middle class.
Osiakwan, indeed, says the growth of the middle class segment will “turn marketing completely on its head”, with techniques such as mobile mar-keting taking centre stage
“I think with a bigger middle class, we will see digital market-ing through means like Face-
book, Twitter, and LinkedIn, for example,” Sandor said.
“These consumers are online more, so this is natural. I also think that it will force all mar-keters to up their game and be really unique – especially when they are appealing to millennials in the middle
class.”
Aisha Pandor, CEO of South Afri-can on-demand domestic clean-ing startup SweepSouth, says, however, that there are two parts to the middle class that companies need to be aware of. For the younger, newer middle class, digital marketing meth-ods and customer service are key, but the traditional middle class, which remains offline, is still key.
“Companies wanting to market to these customers may focus more on the aspirational aspects of being middle class in order to get their attention,” she said.
“When moving more into the traditional early majority seg-ment, traditional offline media
21 analysis21 ANAlysIs
becomes more important for a business-to-consumer startup, and will likely become more relevant.”
Adaptability, then, is key, and Allenberg says Uber has realised the need to be flexible in its market approaches.
“Our strength is that our mar-keting strategies can move and adapt quickly, based on what works best for each city,” she said.
“We have strong and dynamic marketing teams based in each city; these teams have their fingers on the pulse of what moves each city. The teams are always looking to partner with local brands, bringing benefits and exciting campaigns to the citizens of each city.”
Getting it right
The importance of flexibility stressed by Allenberg is picked up by Jenson also, who argues that “middle class” is a different proposition depending on what country you are talking about.
Companies must adapt their messages accordingly.
“The African consumer is very diverse and certainly you can-not use the same strategy to execute in South Africa as you might in kenya or Nigeria,” he said.
“Originally, SleepOut.com started as a service primarily used by expats and interna-tional travellers visiting kenya’s coastal areas. Over the past few years with the emergence of a significant middle class, we have also started offering a pay-on-arrival service that appeals mainly to middle class consum-ers by focusing on flexibility and great value accommoda-tion options.” This diversity is stressed by Mipe Okunseinde, an associate at law firm Coving-ton. She says if companies are going to pursue opportunities in the African market, they must first appreciate just how diverse the African consumer market is.
“Whichever way a company chooses to splice the market, it is essential to identify the
consumer segment to which it wishes to sell and then tailor the products to suit the buying behaviours, needs and prefer-ences of the chosen segment,” she writes on her blog, adding:
“As with any other consumer market, price, brand loyalty, quality (and sometimes other factors) are all relevant con-siderations but each segment weighs these factors differently. Equally as important is deter-mining the supply chain and distribution network that best serves the chosen segment while still keeping transaction costs down.”
Many companies have found this a struggle, even those that are amongst the biggest globally. Earlier this year, food producer Nestlé announced it was cut-ting 15 per cent of its African workforce in 21 countries, and admitted it had overestimated the size of Africa’s middle class.
The company invested heavily in Africa from 2008, and has around 11,000 employees in countries that include kenya and
Angola. But in announcing its cutbacks, Nestlé’s Africa chief executive Cornel krummenacher said the company would be “lucky” to reach annual growth of 10 per cent in the region in future years, and had realised the limitations of targeting the continent’s middle class.
The segment is growing, but more growth is necessary before spending power truly matches the revenue needs of larger international firms. In the meantime, companies need to figure out who they are target-ing and how they are doing that.
“So, no, there is no reason to give up on the African middle class nor the consumer class more generally. However, in order to succeed in the market, it is essential to appreciate the diversity in the African con-sumer market, understand the African consumer segments which one wishes to engage, and then select and tailor the products and routes to market accordingly,” she said. - New African ●
