Econet Global Biography

Background

Econet Global, officially known as Econet Group, is a diversified telecommunications group created in 1993 in Zimbabwe by Strive Masiyiwa. The company was originally intended to be called "Enhanced Communications Network" before the name was abbreviated to Econet.

In 1998, the company was granted a telephony licence at a time when 70% of Zimbabwe's inhabitants had never heard a ringtone. That same year, the group officially started operations by launching mobile phone companies in Botswana and Zimbabwe.

Over the years, Econet expanded its operations and developed proprietary technologies. In 2005, the company created a mobile payment system designed to help non-governmental organizations make cash transfers to refugees following the Burundi war. This framework was subsequently integrated into Econet's core technology and evolved into EcoCash, a mobile payment service officially launched by Econet Enterprises in 2011.

Corporate Structure and Governance

Econet Global is a privately owned group and is not listed on any stock exchange. The overarching holding company, Econet Global Ltd, is registered in Mauritius. The group's headquarters are located in Johannesburg, South Africa, and the organization is controlled by its founder, Strive Masiyiwa.

While the parent group remains private, one of its subsidiaries, Econet Wireless Zimbabwe, is publicly traded on the Zimbabwe Stock Exchange (ZSE). The activities of this specific subsidiary are confined strictly to the Zimbabwean market.

Today, Econet Global operates in 23 African markets, primarily focusing its investments within Sub-Saharan Africa.

Operations and Subsidiaries

Econet provides products and services across various sectors, including mobile and fixed telephony, broadband, satellite, optical fiber networks, and mobile payments. The group operates through specific strategic business units and corporate social enterprises.

• Econet Wireless: This unit covers the group's mobile telephony operations, managing subsidiaries such as Econet Wireless Zimbabwe, Econet Wireless South Africa, Econet Telecom Lesotho, Mascom Botswana, and Econet Leo in Burundi.
• Cassava Technologies: This digital technology and platforms unit manages subsidiaries including Liquid Intelligent Technologies, ZOL, Transaction Payment Solutions, Africa Data Centres, Sasai Fintech, Cassava Remit, Vaya Technologies, and Distributed Power Technologies.
• Cassava Smartech: This division oversees the group's financial and e-commerce services. It includes Steward Bank, a Zimbabwean commercial bank formed after Econet acquired and delisted TN Bank Zimbabwe in 2013. It also operates Ownai (e-commerce), Ruzivo Digital Learning, and mobile-phone-based insurance providers EcoFarmer, EcoSure, and Moovah.
• EcoCash: Operating under Cassava Smartech, this service provides savings accounts, international transfers, banking services, and payroll services. By November 2017, the platform had 6.7 million registered users, representing 80% of adult Zimbabweans.
• Social Enterprises: The group's philanthropic arm includes Delta Philanthropies and the Higherlife Foundation.

Financial History and Market Activity

Econet has actively engaged in acquisitions to expand its footprint, while also navigating periodic financial challenges.

• In October 2014, Econet acquired VimpelCom's Telecel networks in Burundi (U-COM) and the Central African Republic (Telecel RCA) for $65 million.
• Also in 2014, the listed subsidiary Econet Wireless Zimbabwe reported a 14.7% decline in annual profits, falling from $140 million to $119 million.
• In October 2015, the company enacted a 100-employee layoff in response to financial losses caused by a state regulator-enforced tariff reduction.
• Throughout 2015, increasing losses prompted the group to implement a 20 percent salary reduction for its employees in Zimbabwe and negotiate a 15 percent discount with its suppliers.
• Despite the broader economic turmoil and organizational cuts in 2015, the EcoCash service continued to perform well, and the company distributed $15 million in dividends to its shareholders in June of that year.