ZIMBABWE broke up its telecommunications monopoly by granting a licence to a second fixed line telephone company, TeleAccess, headed by Daniel Shumba, a businessman-cum-politician, in January
At the time of getting the licencing, TeleAccess was required by telecommunications regulations to roll out its network within six months – June of the same year.
An excited Shumba told local and international media that not only would he meet the June deadline, but he would also rescue close to one million frustrated potential customers stuck on Tel*One’s stagnant waiting list for fixed phones at that time.
“This (licence) comes as a great relief and gives us the opportunity to demonstrate our ability to offer services to subscribers,” the TeleAccess chief executive told BBC News Online.
He also told the Zimbabwe Independent that “phones would be ringing in June (the same year)”.
His projections were, however, proven too ambitious when TeleAccess failed to roll out as promised. The company went on to miss the June deadline set by the Post and Telecommunications Regulatory Authority (Potraz), a government board that controls the industry.
To explain its failure to meet the stipulated deadline, the company said it was yet to sign interconnection agreements with other networks which include NetOne, Tel*One, Econet and Telecel.
TeleAccess also complained that Potraz had delayed in allocating them numbers for their system. They promised to roll out as soon as the interconnection agreements were signed and the authority approved the numbering plan.
“Work is in progress and we will be able to offer service soon, as we are concluding important agreements namely Interconnect and Numbering Plan with various players in the field,” said the company in a statement last year.
Now, almost 18 months after getting the licence, TeleAccess is yet to roll out its network. Millions are still waiting for the launch of TeleAccess’ first telephone lines.
Telecommunications experts say the number of individuals waiting for fixed phones has increased to more than 1,5 million over the past two years.
Shumba has come up with yet another excuse, this time blaming the current economic downturn.
He said the company had been severely affected by the prevailing foreign currency shortages.
There are now heightened fears that the company might not have the financial stamina to proceed with the project.
Individuals have registered their frustration with Shumba’s failure to launch through angry letters published in local newspapers. Some have called on TeleAccess to relinquish the licence to other capable players.
Details gathered by businessdigest over the past three months from former employees, industrial experts reveal that TeleAccess’ problems are complex.
Lack of funding
At the core of the company’s problems is its failure to entice foreign investors to fund the project. There are doubts whether the project is indeed bankable.
The company has been surviving on overdrafts since its formation. It has also been saddled with a $40 billion overdraft from the Commercial Bank of Zimbabwe (CBZ).
Shumba, however, insists that his debt is under control and could be easily settled once the network kicks off.
In a recent discussion with this paper he said his business was worth millions of US dollars.
“I hold a licence to a business worth millions of US dollars so the bank overdraft is not a problem once we start operating,” Shumba said.
In a bid to raise capital for the business Shumba recently travelled to Canada where he claims to have held crucial discussions with potential sponsors.
Experts have, however, warned that the current crisis in the banking sector is likely to scuttle his efforts to get foreign funding.
They say foreign sponsors are sceptical about the stability of the local financial sector. This has seen Zimbabwean banks losing out on crucial lines of credit. Critics also point out Shumba’s borrowings are largely consumptive.
The bulk of the funds received from Jewel Bank have been channeled towards staff and other recurrent expenses.
The uncertainty surrounding the future of the project has also led to a high staff turnover. At its inception the company had managed to lure highly qualified engineers and experts from the state-owned Tel*One. These engineers have since left the company after it failed to operate as they had anticipated.
This paper has spoken to more than six engineers who have left the company over the past eight months.
The company recently also lost its public relations department. The employees said they were concerned about the company’s constant delays in paying salaries.
TeleAccess currently has a small base with a capacity of only 112 000 lines at the Central Films Laboratory in Newlands.
Shumba also claims to have a sophisticated switching system which he plans to set up at BB House in Harare.
However, an engineer who once worked for the company said a base station and switching system are only basic equipment needed for a network.
“They (TeleAccess) would need smaller base stations to other areas which would then be connected to the central one. They would then need more equipment to physically connect the customers, which is the last mile solution,” he said.
TeleAccess wants to use the wireless connection, a system that is also capital intensive.
“TeleAccess does not have all that equipment, neither does it have the capital to acquire it,” he said.
The company has already bought posh vehicles for senior managers which are proving very expensive to maintain. A fixed network requires trucks to ferry cables, ladders and maintenance team. TeleAccess has not yet acquired these utility vehicles.
War with Potraz
Shumba’s failure to operate has brought him head-to-head with Potraz.
Angry letters have been flying back and forth between TeleAccess and Potraz since May last year. In one of the letters Potraz queries why the company has not yet begun operations.
“The authority (Potraz) is deeply concerned that TeleAccess has not yet been able to roll out commercial services within the time-frame stipulated by the licence,” read the letter from Potraz. “We are quite aware that the majority of our people have no access to telecommunication services, moreso in the rural areas.”
TeleAccess argues that Potraz did not properly implement an official directive to issue it with a second national operator licence that encompasses voice telephony, public data and Internet access. There is currently a stand-off between the two. This battle, experts say, is going to continue unless the company starts the roll out programme.
From telecoms to politics
Shumba has found a new passion in politics after being elected the Zanu PF chairman for Masvingo province. He calls it a strategic move to get access to people in high offices. But problems have not spared his young political career either. He presides over one of the most fractious provinces in Zimbabwe.
He has also clashed with fellow businessman, Walter Muzembi. Just last week war veterans in the province sealed the provincial offices citing serious problems within the party. But Shumba says he will weather the storm. It remains to be seen whether he will manage to save his political career and begin his phone business at the same time.