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Thursday, March 28, 2024
HomeBusinessImproved Broadband Revenue Brings Telone Back To Profitability

Improved Broadband Revenue Brings Telone Back To Profitability

State owned telecommunications giant, Telone revenue for first half of 2019 reached $79 million, a 62 percent jump from the $48.6 million realized same period last year as inroads in broadband development begins to pay dividends.

For the period under review, broadband contribution to revenue has gone up to 51 percent from 43 percent two years ago buoyed by a 15 percent increase in broadband  subscribers that has reached 112 356.

“Since the beginning of the implementation of the National Broadband Project in 2016, TelOne has witnessed an 85% cumulative growth in data revenue resulting for the first time, in the off-setting of voice revenue loss by gain in data revenue, a direct result of the business’ transformation strategy,” read the company statement.

In 2018, the company recorded a $10 million profit charging the parastatal to a break-even, replenishing a $10.2 million loss position realized in 2017.

This profit was attributed to a 37 percent upsurge in broadband revenue of $125 million as compared to $119 million in 2017.

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However the Parastatal is reeling from a myriad of operational threats such as infrastructure vandalism, legacy debts and a heavy debtor’s book of over $150 million, with Government Ministries and Parastatals predominantly featuring.

“Although TelOne’s trade debtors’ book decreased by 7% from $162 million in 2017 to $151 million in 2018, it is still high and efforts are being made to reduce the debtors’ book,”

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“The amount is made up of balances due from Government Ministries, Parastatals, Corporates and Household clients. Government indebtedness to TelOne of $93 million constitutes 62% of the net accounts receivables. Delayed settlement by debtors continues to have a negative impact on the company’s ability to settle critical statutory and contractual obligations,” said the company.

The company paid charges on legacy loans of up to $ 12.4 million last year inherited from the Post and Telecommunications Corporation (PTC) at its unbundling in 2000 on top of a $ 8.9 million penalty charged by ZIMRA for late settlement of its tax obligations.

Government plans to merge the company with mobile telecommunications service provider, NetOne and the development once finalized is expected to rally the partnership on profit course in years to come.

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