Econet Wireless has requested that suppliers take a 20% cut on fees and charges as of the beginning of May 2020.
Zimbabwe’s biggest telecommunications group and a blue-chip stock on the local exchange sent out communication to suppliers on 20 April 2020, informing them of the development.
The company’s chief supply chain officer, Sharon Marufu stated: “We request that all our suppliers of goods and services to Econet Wireless Zimbabwe bear with us by reducing their prices to Econet by at least 20% with effect from May 1 2020.”
Marufu said the company was operating under difficult trading conditions and sought the commitment of suppliers to help it “navigate through the tough times.”
She added: “The harsh economic environment and the compounded effects of the COVID-19 pandemic have necessitated an urgent review of our business operations. As Econet we operate in a regulated industry where or tariffs are significantly trailing the upward movement in our operational costs, threatening the viability of our business.”
Zimbabwean companies continue to take a knock on earnings as inflation escalates.
In the previous year, telecom companies were forced to fund power supply through installation of diesel generators, solar systems or hybrid Tesla batteries owing to power outages – although electricity supply has improved in the past month.
COVID-19 has also cut into the revenue base for some companies although technology, telecom and internet companies could see an increased usage of their services owing to the lock-down measures instituted by President Emmerson Mnangagwa’s administration to curb the spread of the virus.
Econet described its appeal to suppliers as a “necessary pain” which will help it “retain suppliers” and continue offering telecom services to its subscribers in the country.