Zimbabwe News and Internet Radio

Telecel denies its on the verge of collapse… seeks tariffs review to stay afloat

By Munyaradzi Musiiwa

Zimbabwe’s third largest mobile telephone operator Telecel Zimbabwe has conceded that it is facing challenges and has been failing to meet some of its obligations due to inadequate funding.

Telecel Zimbabwe
Telecel Zimbabwe HQ in Harare

In a statement, released by acting public relations and corporate social responsibility manager Mr Simeon Mutize, Telecel acknowledged that it has been under-performing due to a host of challenges. Mr Mutize, however, dismissed that the company was on the verge of collapse.

“Telecel Zimbabwe (Pvt) Ltd would like to assure all its stakeholders and customers, that while the company is facing some challenges, the company is not at the brink of collapse and continues to offer quality service to its customers.

“Like all other local organisations, Telecel Zimbabwe’s operations have been affected by a host of factors, both macro and micro-economic, but attributed mainly to limited funding for the company over a long period of time, in the face of challenging economic conditions in Zimbabwe.

“Specifically, rapid depreciation of the local currency and the levels of tariffs increases approved, which continue to lag behind inflation, have affected the ability to meet the foreign currency denominated obligations, especially spares for equipment and service level agreements and support.

This limited vendor support has resulted in some network disruptions during the festive season, which have since been rectified.

In order to mitigate these challenges, the company has been on a very aggressive import substitution and local skills transfer,” he said.

Mr Mutize said Telecel and other industry stakeholders continue to engage all the relevant authorities to ensure that the tariffs are adjusted in line with the cost movement of other basic operational costs.

“The company’s main switching centres are in the industrial area and have been subjected to prolonged power outages which have resulted in the company’s technology operating costs ballooning due to the use of alternative power, particularly diesel, and has in turn affected base station availability in other parts of the country.

The company is in advanced discussions with the power authorities and Government officials in the Ministry of Energy (and Power Development) to ensure a dedicated power line to the switching centres and in addition the company is investing in alternative power solutions such Tesla solar batteries for its base stations,” he said.

“The Telecel Board and shareholders are aware of the ongoing challenges.

Plans are underway to address the issue of recapitalisation and in this regard, a five-year strategic plan has already been formulated and adopted.

The finalisation of all outstanding financial statements is on course and this will open avenues for new funding from financial institutions.” Sunday News