Zimbabwean Operator Seeks Foreign Currency

The Zimbabwe based Econet Wireless says that it is going to try and purchase other "export oriented" companies in an attempt to secure the necessary foreign currency to fund its mobile network expansion.

Econet Wireless Capital (EWC), a subsidiary which was set up by Econet about two years ago, is the group's investment arm through which it invests in various sectors. Some of the key investments that have been undertaken so far include stakes in the diversified financial services group Kingdom Financial Holdings and insurance giant First Mutual Limited.

General Manager of EWC, Ricky Mapani, said that until now, EWC has been concentrating mainly on buying shares in well run public companies, and helping Econet manage its treasury function more effectively.

"As you know most of EWZ's customers are pre-paid, which means we handle a lot of cash. In a hyper inflationary environment with low interest rates, this can lead to huge monetary losses. We have to manage our cash properly to avoid that happening, so we make both long term and short term investments to protect the value of the money," he said.

Mr. Mapani said that the company has now shifted its strategy on investments to include exporters who have good growth prospects but require a lot of Zimbabwe dollars for their operations.

"We have begun to look closely at such companies, and we are beginning to make some investments," he said, without elaborating on the nature of the investment already made.

Mr. Mapani said that Econet's strong cash position, as well as a its share price gives it a lot of options when it comes to making payments. " We prefer to pay cash but we also look at payments using Econet shares as well," he said.

Econet Wireless is estimated to have ended last year with some 513,000 subscribers, according to figures from The Mobile World industry database."

Posted to the site on 1st May 2007