Author(s): Duarte, Maria Flor de Soveral Padeira Cardoso
Date: 2016
Persistent ID: http://hdl.handle.net/10362/16690
Origin: Repositório Institucional da UNL
Subject(s): Telecommunications; Zimbabwe; Country risk; Mobile money; Valuation; Domínio/Área Científica::Ciências Sociais::Economia e Gestão
In February 2015, when Econet Wireless Zimbabwe Limited, EWZL, the market leader of the telecommunications sector in Zimbabwe, published the financial results, the management team was worried about the shareholders’ reaction. With over 60% market share in its core business (the voice and SMS market), it has achieved remarkable results due to the great diversification strategy. However, the share price was continuously falling due to exogenous factors that were pressuring margins and threatening future sustainability of the company. EWZL was highly exposed to Zimbabwe’s specific risks and regulatory policies. This case explores both the business environment surrounding the company and the strategic decisions necessary to fight against the economic and political challenges. Students will step into Econet’s obstacles by analyzing the strategies and diagnosing the multiple risk factors affecting the profitability of the firm. Furthermore, they will have to compute the valuation of the firm, facing several challenges of a developing country.
