Zimbabwe News and Internet Radio

Future of Telecel Zimbabwe in limbo again

By Michael Malakata

The future of Telecel Zimbabwe is in limbo following the operator’s failure to pay a $137 million operating license renewal fee. 

Future of Telecel Zimbabwe is in limbo once again
Future of Telecel Zimbabwe is in limbo once again

Zimbabwe’s telecommunications watchdog, the Posts and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), allowed the renewal of Telecel’s operating license for 20 years after a dispute with foreign owners last year over ownership of the company.

Telecel Zimbabwe is 60 percent owned by Egypt-based Orascom while the rest of the company is owned by a Zimbabwean consortium called the Empowerment Corporation. Russia’s VimpelCom, in turn, is Orascom’s parent company.

Telecel Zimbabwe’s 15-year license expired in June last year and was renewed after it promised the Zimbabwean government that it would abide by the country’s indigenisation law, which states that foreign companies should cede 51 percent of ownership to black Zimbabweans.

But the Zimbabwean government has now complained that the company has failed to pay the $137 million for the license. The Zimbabwean government has also complained that the company has not yet complied with the indigenisation law as promised.

Telecel Zimbabwe has more than 2.5 million customers and is the country’s second largest operator after Econet Wireless.

Zimbabwe’s ICT postal and courier services permanent secretary Samuel Kundishora has confirmed that the operator has failed to meet its license obligations.

“Telecel has to do something to ensure that it meets its license obligations. It is important for telecom companies to commit themselves to do what would have been agreed,” Kundishora told the media last week.

But Telecel Zimbabwe general manager Angeline Vere released a statement claiming the company is on track to meet its payment obligations and that it has already made an initial deposit of $14 million.

“Our records at hand will confirm that instructions to pay the deposit were immediately processed through our banks. Both banks have confirmed to both regulatory and ministry officials the obligation they have to Telecel to meet its commitment,” said Vere.

Vere added that the next installment is due to be paid in December 2014 and that Telecel is geared to meet the obligation as per agreed payment plan with the Zimbabwean government. The company has over the years struggled to keep its operation in Zimbabwe following differences with POTRAZ.

In 2007, the operator’s license was cancelled by POTRAZ over the company’s shareholding structure, but the cancellation was reversed after the company successfully contested the matter with the Zimbabwean government.

However, VimpelCom is reported to be preparing to sell its stake in Telecel due to the continuing friction with the Zimbabwean government. Regional telecom analysts blame the indigenisation law for lack of international investment in the country’s telecom sector.

Since 2011, the Zimbabwean government has been looking for an international or regional operator to buy a 49 percent stake in the financially troubled, government-owned operator NetOne, but to no avail. Cnmeonline.com