Econet asks suppliers to cut prices

“We ourselves were forced to lower our prices by 40 percent”.

ECONET Wireless on Tuesday asked most of its local and international suppliers to cut the prices of their supplies to the company by more than 15 percent.

The measures, which are part of Econet’s cost cutting drive, affect all suppliers of goods and services. A task force, led by the head of Econet Wireless Global Tracy Mpofu who is based in South Africa, is working at the local Zimbabwean unit to ensure the successful implementation of a major cost cutting exercise.

“Any supplier who sells goods or services to Econet Wireless Zimbabwe, must cut prices by at least 15 percent or will be blacklisted as a supplier with effect from the end of July,” said a statement from Econet.

Econet Wireless Zimbabwe CEO Douglas Mboweni confirmed the new measures, saying: “We ourselves were forced to lower our prices by 40 percent, so if our suppliers don’t cut their own prices, we will go out of business. We do not think 15 percent is too much to ask others for.”

The group-wide cost cutting initiatives are expected to go on for several months. Even subsidiaries of the company, such as Steward Bank and Mutare Bottling Company, have also been ordered to do the same.

Econet has also cut its capital expenditure programme by 25 percent  for the current financial year whilst staff have voluntarily had their salaries cut by 20 percent.

Mboweni said Econet was a strong company which had the capacity to weather any storm.

“We have carefully analysed the prevailing economic situation, and we have taken the corrective measures to protect the business. We urge others to emulate our example by being proactive rather than to just sit and watch helplessly,” said Mboweni.