BH24 is Zimbabwe's premium business news and advertising platform published by Zimpapers (1980) Ltd

1. By Tawanda Musarurwa
HARARE – Data usage
accounted for a 4,7 percent
rise in Zimbabwe’s mobile
telecommunication firms’
combined revenues during
the last quarter of 2015,
the latest Postal and Tele-
communications Regulatory
Authority of Zimbabwe report
shows.
But over-the-top (OTT) data
packages for WhatsApp and
Facebook are still to claim a
significant portion of mobile
internet and data usage. The
country has three mobile
telecommunication opera-
tors, namely Econet Zimba-
bwe, Telecel Zimbabwe and
NetOne.
According to the ‘Zimba-
bwe Post & Telecoms Sector
Report Q4 2015’, total reve-
nue for the three mobile tel-
ecom companies increased by
4,7 percent to $191 million
from $182,5 million recorded
in the previous quarter, and
generally out-did revenue
performance in all previous
quarters in 2015.
POTRAZ attributed the
growth in revenue to a rise
mobile data usage during the
quarter under review. The
statistics show that mobile
data utilisation increased
News Update as @ 1530 hours, Thursday 17 March 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
Data usage drives Telcos’ Q4 revenue growth

2. by 27,4 percent to record
1 203 378 839 megabytes
(MB) from 944 268 192MB
recorded in the previous
quarter.
OTT data packages for
WhatsApp and Facebook
contributed 34 percent and 3
percent respectively to total
mobile internet and data
usage, while the balance (63
percent) was indicated as
‘other data usage.’
This data comes on the back
of recent statements by ICT,
postal and Courier Services
Minister Supa Mandiwanzira
that his Minsitry had turned
down suggestions by the tel-
cos to ban OTT services.
In terms of internet and data
utilisation Econet had 79,5
percent market share, while
Telecel and NetOne had 7,1
percent and 13,4 percent
respectively. And in respect
of revenues, Econet also
dominated market share at
70,2 percent, while NetOne
and Telecel had 18,3 percent
and 11,5 percent, respec-
tively.
But during the period under
review, it was only NetOne
that gained in overall market
share by 1,3 percent. Econet
and Telecel lost market share
by 0,7 percent and 0,6 per-
cent, respectively. At $191
million, the fourth quarter
had the highest revenue of
all the quarters last year, up
from $182,5 million in the
third quarter. The first and
second quarters had recorded
revenues of $188,5 million
and $183,1 million, respec-
tively.
Mobile/Internet Penetra-
tion Continues On The Up
The POTRAZ report also
showed that the country’s
mobile penetration rate
increased to 95,4 percent in
the fourth quarter from 92,8
percent previously.
NetOne recorded the high-
est growth posting an 8,8
percent increase in active
subscribers to a total of
4,134 million active users,
while Econet remains domi-
nant with 6,7 million active
subscribers. Telecel comes in
third with 1,9 million active
subscribers. Zimbabwe’s
internet penetration rate also
increased, improving by 1,5
percent from 46,6 percent
in the third quarter to 48,1
percent in December 2015.
This was after active internet
subscriptions rose 8 per-
cent during the period under
review to 6 575 591 from 6
086 827 subscriptions in the
previous quarter.
Mobile internet made up 95,6
percentof total internet sub-
scriptions. LTE registered the
highest increase in subscrip-
tions. This is attributed to
the increase in LTE access as
Econet and NetOne are roll-
ing out LTE base stations.
“Leased lines, dial up, WiMAX
and CDMA technologies reg-
istered declines in subscrip-
tions as corporates and some
households are changing to
other technologies like fibre
and ADSL,” said POTRAZ.●
2 news

3. BH243

4. BH244

5. 5 news
02 03
ADD TO CART
Save big on selected
Products of your choice
PAYMENT
You can purchase
whenever, wherever
using:
DELIVERY
Spend $30 or more
on your purchases
and get free
delivery
01 Hello Convenience
www.hammerandtongues.com
BIG CONVENIENCE+
BIG SAVINGS+
BIG OPPORTUNITIES
= BIG HAPPINESS
SHOP ONLINE!!
BH24 Reporter
HARARE -Plastic products
manufacturer Proplastics
has reported a 35 percent
jump in after-tax profit to
$652 381 for the year ended
December 31, 2015.
The improvement in profita-
bility was driven by revenue
growth of 6 percent to $14,1
million.
“Driven by volume growth,
an expansion in gross for
most of the products (itself
a function of improved
manufacturing efficiency
and better sourcing of raw
materials), as well as lower
funding costs for the group
on the back of negotiating
favourable rates on borrow-
ings,” said the company in a
statement accompanying the
results.
Gross profit was up 15 per-
cent to $3,2 million as gross
profit margin improved to 23
percent from 21 percent in
the prior comparable period.
But overheads rose 16
percent attributable to the
once-off costs of the unbun-
dling exercise from Masimba
Holdings, said management.
EBIDTA grew by 20 percent
to $1,7 million, while finance
costs were 21 percent down
from prior year. Profit before
tax grew by 28 percent to
4832 425. The company’s
board has proposed a final
dividend of 0.15 cents for
the period just ended.
Management said the deci-
sion to declare a dividend
was supported by the busi-
ness’ profitability and ability
to generate cash.●
Proplastics’ after-tax profit jumps 35pc

6. BH246

7. BH247

8. BH24 Reporter
HARARE– Zimbabwe
received the Best Destina-
tion for adventure Award
from the Pacific Area Travel
Writers Association (PATWA)
at the just ended Interna-
tional Tourism Bourse (ITB)
which took place in Berlin,
Germany.
The Pacific Area Travel Writ-
ers Association (PATWA) is
a professional organisation
of travel writers which was
founded in 1998, in Colombo,
Sri Lanka with India as its
base.
The Award was presented to
the Minister of Tourism and
Hospitality Industry Engineer
Walter Mzembi at an award
ceremony officiated by the
UNWTO Secretary General Dr
Talib Rifai on the sidelines of
ITB 2016.
Bestowing of this achiever
tourism destination status
by PATWA affirms the evi-
dent interest in Zimbabwe’s
tourism offering as witnessed
during the ITB tourism fair.
The award distinguishes the
country’s tourism vibrancy
despite the challenges the
industry continues to face in
adequately executing desti-
nation promotion initiatives
in various markets around
the world.
It comes at time the Ministry
of Tourism and Hospitality
Industry is championing an
all-encompassing national
brand so as to fully realise
the country’s tourism, invest-
ment and trade potential.●
8 news
Zimbabwe awarded ‘best destination for adventure’
· Farms
· Mines
· Businesses
· More!
GET A QUOTE
We won’t let you
down! Delivered in
72hrs, countrywide!
NEED
FUEL?
Blend, Diesel, Paraffin
Tel: 04 852517 / 870580
admin@ramafrica.com

9. BH249

10. BH2410

11. BH24 Reporter
HARARE – Sibanye Gold Ltd
is set to take over Aquarius
Platinum – and subsequently
its shareholding in the
Zvishavane-based Mimosa
Platinum – after the South
African Competition Com-
mission and the Commission
Tribunal approved the trans-
action.
Sinbanye is South Africa’s
largest gold producer.
Aquarius announced the
approval today:“These
approvals were the final reg-
ulatory approvals required
for the transaction, which
was approved by Aquarius
shareholders in January, to
proceed.
‘Aquarius and Sibanye are
now in the process of con-
firming the Conditions Fulfil-
ment Date.
“Once the Conditions Fulfil-
ment Date has been con-
firmed, Aquarius will release
an updated timetable of
events leading up to comple-
tion of the transaction and
payment to Aquarius share-
holders,” said Aquarius.
In October last year, Sibanye
agreed to buy Aquarius Plati-
num for $294 million.
Mimosa Platinum was Aquar-
ius’ 50-50 joint venture with
Impala Platinum, and is one
of the most cost efficient and
safest platinum group metals
(PGM) producers in Zimba-
bwe.●
11 news
Sibanye Gold’s Mimosa take-over nears

12. BH2412

13. BH2413

14. HARARE - The equities
market waded into negative
territory in today’s trades,
bucking gains over the two
previous trading sessions as
the mainstream industrial
index lost 0,19 to close at
99.79.
Dragging down the index
was cigarette producer BAT
which shed $0,2500 to close
at $10,7500 while milk
processor Dairibord $0,0010
to trade at $0,06800 after
the company reported a 19
percent increase in volumes
and a 4 percent growth in
revenue for the year ended
December 31, 2015. And telecoms giant Econet
also eased $0,0010 to trade
at $0,2310.
On the upside, ART Corpo-
ration gained a significant
$0,0020 to close at $0,0120,
while Padenga rose $0,0006
to $0,0606 and Meikles
went up $0,0004 to close at
$0,0704.
The mining index was flat
at 19.22 as Bindura, Fal-
gold, Hwange and RioZim
maintained previous price
levels at $0,0096, $0,0050,
$0,0300 and $0,1040
respectively
- BH24 Reporter ●
ZSE14
Equities slide into the red

15. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
ART 20.00 1.20 BAT -2.27 1,075.00
Padenga 0.99 6.06 Dairibord 1.44 6.80
Meikles 0.57 7.04 Econet -0.43 23.10
Index Previous Today Move Change
Industrial 99.98 99.79 -0.19 points -0.19%
Mining 19.22 19.22 +0.00 points +0.00%
15 zse tables
ZSE
Indices
Stock Exchange
Previous
today

16. 16 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
17 March 2016
Energy
(Megawatts)
Hwange 308 MW
Kariba 468 MW
Harare 30 MW
Munyati 0 MW
Bulawayo 0 MW
Imports 0 - 400 MW
Total 1020 MW
• Thursday 24 March 2016 - Annual General Meeting of Willdale Limited; Place: Boardroom, Willdale Administration Block,
19.5km peg Lomagundi Road, Mount Hampden; Time: 1100 hours...
• Analyst briefing - Old Mutual Zimbabwe, Steward Room, Meikles Hotel, March 30, 1430hrs
THE BH24 DIARY

17. JOHANNESBURG - South Afri-
ca's rand fell early today after
claims that the Gupta family
with close ties to President Jacob
Zuma may have been behind
his decision to sack the coun-
try's respected finance minister
Nhlanhla Nene in December.
The opposition called for the
resignation of Zuma after
Deputy Finance Minister Mcebisi
Jonas said late on Wednesday
the Gupta family had offered
him Nene's job but that he had
rejected it immediately on the
grounds that such a move vio-
lated South Africa's democracy.
At 0657 GMT the rand had
slipped 0,64 percent to 15,7400
per dollar, reversing gains
triggered by the United States
central bank's decision to keep
its lending rates unchanged.
Jonas' claims concerning the
Guptas came just as a prolonged
row between Finance Minister
Pravin Gordhan and the elite
Hawks police unit has raised
concerns that the run on the
rand and bonds seen in Decem-
ber when Nene was fired could
be repeated.
Earlier on Wednesday, the rand
had slipped to its weakest in
more than two weeks over that
stand-off.
Bonds were flat in early trade.
The benchmark paper due 2026
still hovering around 2-week
highs at 9,465 percent.
Gordhan's confrontation with the
police and the claims by Jonas
come in the same week that
rating's agency Moody's was
expected to be in the country to
decide on whether to downgrade
the country's credit rating, which
is two notches above "junk".
Investors fear further political
uncertainty could hasten a down-
grade, with Fitch and Standard &
Poor's already rating the country
just one step above subinvest-
ment grade.
South Africa's Reserve Bank
decides on interest rates at 1300
GMT, where is expected to keep
rates on hold.
Zuma is due to answer questions
in parliament on Thursday, and
the ruling African National Con-
gress (ANC) is holding a sched-
uled meeting of its top brass this
weekend at which the scandal
will be discussed.
"The whale in the room is that
the ANC could recall (remove)
the president this weekend," said
chief analyst at Rand Merchant
Bank John Cairns in a note. -
Reuters●
regioNAL News17
Rand dips over Gupta row on finmin job

18. As the mining industry strug-
gles to respond to China’s
economic shift, Rio Tinto
Group named its top copper
executive Jean-Sebastien
Jacques as chief execu-
tive officer to succeed Sam
Walsh, who drove the pro-
ducer’s iron ore expansion
over the past decade.
Jacques will join the board
of the world’s second-biggest
mining company and Walsh
will retire, London-based Rio
said today in a statement.
The 44-year-old Jacques
completed negotiations in
December for a $4,4 billion
financing package to expand
Mongolia’s Oyu Tolgoi mine
as the company seeks to
boost copper output with
demand forecast to rise from
about the end of the decade.
“Copper is the commodity
that Rio is probably the most
excited about, and they are
chucking in the copper guy,”
Mathew Hodge, an analyst at
Morningstar Inc. in Sydney,
said by phone. “Last time
they made a transition, iron
ore was the thing they were
most excited about and they
chucked in the iron ore guy.”
Walsh was appointed in
January 2013 to replace Tom
Albanese after the company
was forced to take about $14
billion of write downs for
failed deals in aluminum and
coal.
The 66-year-old Australian
led a concerted cost-cutting
regime during his tenure,
divesting assets and trim-
ming project spending as
prices of iron ore, its top
earner, slumped from a 2011
peak.
Jacques, previously a group
strategy director for Tata
Steel Group, takes charge
of Rio’s portfolio in July
amid the worst commodity
price slump in a generation
that’s eroded profits and
forced competitors, includ-
ing Glencore Plc and Anglo
American Plc, to sell assets
amid pressure from investors
and credit ratings agen-
cies to conserve cash. The
Bloomberg Commodity Index
of returns on about 22 raw
materials tumbled in January
to the lowest since 1991.
The biggest miners are also
grappling with China’s shift
from growth led by heavy
industry to consumer-led
expansion that’s seen as
favoring metals includ-
ing copper, used in cars to
power grids and housing, and
aluminum. Iron ore prices
dropped to a six-year low in
December.
“Some of his biggest chal-
lenges are the things that
Jacques is already dealing
with,” said Brenton Saun-
ders, a Sydney-based invest-
ment analyst with BT Invest-
ment Management Ltd.,
which manages about A$78
billion ($56 billion) of assets.
They include the Oyu Tolgoi
project, the Grasberg gold
and copper mine in Indonesia
and Rio’s coal portfolo, he
said.
Rio rose 2,4 percent in Syd-
ney trading Thursday, before
the announcement was
made, trimming its decline
this year to 2,2 percent.
Walsh, whose contract had
originally been due to end
in December 2015, had his
tenure extended in Octo-
ber 2014, weeks after the
company publicly rebuffed a
merger approach from Glen-
core. Jacques, who will have
a base annual salary of 1,08
million pounds ($1,5 million)
in his new role has “proven
to be a standout performer
as a leader in our business,”
Walsh in a statement.
“Against the backdrop of a
volatile economic environ-
ment, Sam and his team
have transformed the busi-
ness,” Jacques said in the
statement. “Sam leaves Rio
Tinto as a much stronger
company, with a bright
future.” - Bloomberg●
internatioNAL News18
Rio Tinto appoints copper chief Jacques CEO to succeed Walsh
Jean-Sebastien Jacques

19. By Tom Jackson
According to the African
Development Bank (AfDB), as
far back as 2011 there were
already 313 million people – or
34 per cent of the continent’s
total population – that could be
referred to as middle class.
Yet at the same time, other par-
ties see it differently. According
to Standard Bank, only 15 mil-
lion households in the 11 largest
Sub-Saharan African economies
fall into the bracket. Consul-
tancy firm EIU Canback agrees
there has been growth, but not
as much as many think, sug-
gesting that the African middle
class rose to 6,2 percent of the
continent’s population in 2014,
up from 4,4 percent in 2004.
The disparities in estimates
arise from differences in defin-
ing what exactly “middle class”
is. The AfDB defines it as people
spending between $2 and $20
per day, and has a separate cat-
egory for “stable middle class”
– which it said stood at 123
million people in 2011. Income,
wealth, and consumption can all
be used to establish class.
Yet despite the disparities
in exactly how big it is, all
observers – including the AfDB
and Standard Bank – remain
convinced Africa’s consumer
market is burgeoning, and
bringing with it increased oppor-
tunities for businesses on the
continent.
Investor George Soros says the
growth of the continent’s middle
class is one of the only eco-
nomic bright spots across the
world currently.
The size of the opportunity has
not been lost on international
companies. Accommodation
booking platform Airbnb, which
rents out rooms or whole prop-
erties online, is scaling up its
operations in the region, having
already seen sizeable growth. It
has more than doubled listings
and seen user numbers increase
by 145 per cent over the last
year.
Airbnb is following a path
already mapped out by taxi-hail-
ing giant Uber, which has rapidly
established an African presence
in eight cities – Cape Town,
Durban, Johannesburg, Pretoria,
Nairobi, Cairo, Casablanca and
Lagos. Samantha Allenberg,
communications associate for
Africa at Uber, says the com-
pany believes there is great
potential given the growth of
the continent’s middle class.
“We are changing the way peo-
ple think about getting around,
we are changing the way people
connect with the people in their
cities. In Africa we have part-
nered with a significant number
of drivers and provided them
with the tools to build their own
small businesses. We have ena-
bled thousands of work opportu-
nities across Africa and believe
we can enable thousands more
in the coming years,” she said.
This international interest in
Africa is only set to increase as
the middle class – however we
define it – continues to grow.
The AfDB says there will be 1,1
billion middle class Africans
by 2060, while the McKinsey
Global Institute thinks African
consumer spending will hit $1,4
trillion by as soon as 2020.
Angel investor Eric Osiakwan
said this continuing growth
offers international companies a
market that was previously very
small, and where before they
would have had to scale much
faster.
“The middle class has an
unquenchable taste for tech-
nology innovation but we have
seen this now at the bottom of
the pyramid markets especially,
because in their case it is pro-
viding a livelihood,” he said.
“So as technology lifts people
out of poverty into the middle
class we would see an expan-
sion that pulls in a level of
momentum that would generate
a tipping point effect some-
where in the 21st century.”
What the middle class really
wants
It is not just large interna-
tional companies that are set
to benefit from the growth of
19 analysis19 analysis
Africa’s rising middle class – and why it matters

20. 20 analysis20 analysis
the continent’s middle class.
Arielle Sandor is chief executive
officer of Kenyan jobs platform
Duma Works, and says it has
opened up new opportunities for
smaller, more local businesses
too.
“The growth of the middle class
signifies that more people will
have enough money to begin
building personal businesses,”
she said.
“When they do this, Duma
Works wants to be there for
them when they need to find
talent to support this growing
business.”
Youth – and media consump-
tion – are key to this segment.
Young Africans – in many
African countries more than half
the population is under the age
of 25 – are increasingly online.
Internet penetration on the con-
tinent has increased by 6,839
per cent in the last 15 years,
with Frost & Sullivan saying
mobile penetration in the region
will increase to 79 per cent by
2020.
But what do these consumers
want? Sandor says middle class
consumers typically have higher
standards for services they are
using.
“This is because they have
increased exposure to many
options, rather than relying on
the most broadcasted company
that holds a monopoly in a given
sector,” she said.
Johann Jenson, CEO of accom-
modation marketplace SleepOut.
com, agrees with Sandor that
customer service has become
especially key as the middle
class grows and competition for
its attention increases.
“Modern African consumers are
still not as demanding as what
you might find in other econo-
mies such as the US or Europe,
but there is a noticeable trend
towards higher service levels
given the multiple channels
consumers now have to voice
their discontent or satisfaction,”
he said.
For Osiakwan, the middle
class is looking for appropriate
technology to save them time
on “mundane stuff”, something
services like Uber, Airbnb and
SleepOut can certainly claim to
do.
In an African business climate
where many companies have
traditionally relied on newspa-
pers or billboards to advertise
to potential customers, does the
rise of a younger, more affluent
middle class change things? The
answer is almost certainly yes,
but the change is slow, and as
yet inefficient and ineffective.
While the vast majority of mid-
dle class consumers operate in
the digital space, many African
marketers are still using mass
approaches in offline media.
Yet change is being driven by
both multinationals and smaller,
young businesses targeting the
middle class.
Osiakwan, indeed, says the
growth of the middle class
segment will “turn marketing
completely on its head”, with
techniques such as mobile mar-
keting taking centre stage
“I think with a bigger middle
class, we will see digital market-
ing through means like Face-
book, Twitter, and LinkedIn, for
example,” Sandor said.
“These consumers are online
more, so this is natural. I also
think that it will force all mar-
keters to up their game and be
really unique – especially when
they are appealing to millennials
in the middle
class.”
Aisha Pandor, CEO of South Afri-
can on-demand domestic clean-
ing startup SweepSouth, says,
however, that there are two
parts to the middle class that
companies need to be aware of.
For the younger, newer middle
class, digital marketing meth-
ods and customer service are
key, but the traditional middle
class, which remains offline, is
still key.
“Companies wanting to market
to these customers may focus
more on the aspirational aspects
of being middle class in order to
get their attention,” she said.
“When moving more into the
traditional early majority seg-
ment, traditional offline media

21. 21 analysis21 analysis
becomes more important for a
business-to-consumer startup,
and will likely become more
relevant.”
Adaptability, then, is key, and
Allenberg says Uber has realised
the need to be flexible in its
market approaches.
“Our strength is that our mar-
keting strategies can move and
adapt quickly, based on what
works best for each city,” she
said.
“We have strong and dynamic
marketing teams based in each
city; these teams have their
fingers on the pulse of what
moves each city. The teams are
always looking to partner with
local brands, bringing benefits
and exciting campaigns to the
citizens of each city.”
Getting it right
The importance of flexibility
stressed by Allenberg is picked
up by Jenson also, who argues
that “middle class” is a different
proposition depending on what
country you are talking about.
Companies must adapt their
messages accordingly.
“The African consumer is very
diverse and certainly you can-
not use the same strategy to
execute in South Africa as you
might in Kenya or Nigeria,” he
said.
“Originally, SleepOut.com
started as a service primarily
used by expats and interna-
tional travellers visiting Kenya’s
coastal areas. Over the past few
years with the emergence of a
significant middle class, we have
also started offering a pay-
on-arrival service that appeals
mainly to middle class consum-
ers by focusing on flexibility
and great value accommoda-
tion options.” This diversity is
stressed by Mipe Okunseinde,
an associate at law firm Coving-
ton. She says if companies are
going to pursue opportunities in
the African market, they must
first appreciate just how diverse
the African consumer market is.
“Whichever way a company
chooses to splice the market,
it is essential to identify the
consumer segment to which it
wishes to sell and then tailor
the products to suit the buying
behaviours, needs and prefer-
ences of the chosen segment,”
she writes on her blog, adding:
“As with any other consumer
market, price, brand loyalty,
quality (and sometimes other
factors) are all relevant con-
siderations but each segment
weighs these factors differently.
Equally as important is deter-
mining the supply chain and
distribution network that best
serves the chosen segment
while still keeping transaction
costs down.”
Many companies have found this
a struggle, even those that are
amongst the biggest globally.
Earlier this year, food producer
Nestlé announced it was cut-
ting 15 per cent of its African
workforce in 21 countries, and
admitted it had overestimated
the size of Africa’s middle class.
The company invested heavily
in Africa from 2008, and has
around 11,000 employees in
countries that include Kenya and
Angola. But in announcing its
cutbacks, Nestlé’s Africa chief
executive Cornel Krummenacher
said the company would be
“lucky” to reach annual growth
of 10 per cent in the region in
future years, and had realised
the limitations of targeting the
continent’s middle class.
The segment is growing, but
more growth is necessary
before spending power truly
matches the revenue needs of
larger international firms. In the
meantime, companies need to
figure out who they are target-
ing and how they are doing that.
“So, no, there is no reason to
give up on the African middle
class nor the consumer class
more generally. However, in
order to succeed in the market,
it is essential to appreciate the
diversity in the African con-
sumer market, understand the
African consumer segments
which one wishes to engage,
and then select and tailor the
products and routes to market
accordingly,” she said. - New
African ●