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MarketScreener Homepage  >  Equities  >  Zimbabwe Stock Exchange  >  Econet Wireless Zimbabwe Limited    ECO   ZW0009012122

ECONET WIRELESS ZIMBABWE LIMITED

(ECO)
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Econet Wireless Zimbabwe : Reduce Prices By 20 Percent - Econet

05/01/2020 | 06:06am EST

Zimbabwe's largest mobile phone operator, Econet Wireless, has requested suppliers to reduce prices by 20 percent in the wake of Covid-19 pandemic.

Econet, which cannot easily pass rising costs of goods and services that it requires in its operations because tariffs are regulated and always lag inflation and the exchange rate, believes commitment and co-operation from suppliers will help in navigating through the tough times.

The obtaining tariffs, which were approved early March have been rendered sub-economic by rising inflation which came out at 676 percent in March and the falling exchange rate from 30 to 50 for every US dollar.

The last March tariff adjustment came approximately five months after the last one in October 2019 and this is despite the fact that suppliers have put up charges several times.

Other suppliers such as landlords, have pegged charges to the US dollar and with a falling exchange rate and this means costs to Econet are consistently rising.

This, analysts say, threatens the viability of not only Econet, but also of its suppliers engaged to safeguard the business.

"It is in this context that we request all goods and service suppliers to Econet Wireless Zimbabwe to bear with us and reduce prices by at least 20 percent with effect from May 1, 2020," reads a letter to suppliers seen by this publication.

Rising costs of goods and services have been an albatross for businesses and consumers and the proactive action taken by Econet is expected to protect the business and its value chain.

Market watchers say the 20 percent price adjustment will help Econet to continue offering uninterrupted services, which is under threat if they fail to pay their suppliers if costs remain elevated against income.

Covid-19 has brought with it increased usage of the network, but with inflation and falling exchange rate, the revenue generated is not enough to keep the network up and running.

"As we take this necessary pain to protect

our business, we sincerely hope we will share in the benefits when the economy turns around," said Econet.

Government and other economic players last week took almost similar measures after agreeing to lower prices to pre-lockdown levels.

Copyright The Herald. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

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Managers
NameTitle
Douglas Mboweni Chief Executive Officer & Executive Director
James Myers Chairman
Fayaz King Chief Operating Officer
Roy Chimanikire Finance Director & Executive Director
Kezito Makuni Technical Director
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