HomeBusiness DigestWithout money, dreams remain just that'

Without money, dreams remain just that’

Shakeman Mugari

SOMEONE should have told TeleAcess Zimbabwe (Pvt) chief executive and founder Daniel Shumba that in the business world without money dreams will remain just that – dreams.


And someone should have also told him perhaps that like in money matters where people should live within their means, businessmen should also dream within their means.

Unfortunately, judging by the events of the past three years since Shumba got the second fixed network licence on January 3 2003, it seems nobody bothered to remind him of these crucial facts, or, if someone did, he probably brushed the advice aside.

Shumba’s dream of operating a fixed telephone network under his TeleAccess Zimbabwe crumbled this week when the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) announced that it had cancelled his licence.

“Potraz would like to bring to the attention of the public that the licence number PFT20030102 issued to TeleAccess Zimbabwe was cancelled in terms of Section 43 of the Postal and Telecommunications Act (Chapter 12:05) on 24th November, 2005 and that TeleAccess has been duly informed in writing of this cancellation,” said the authority in a statement.

Potraz, which has been accused of treating Shumba with kid gloves in the past, noted that TeleAccess “had failed to roll out its network and to offer any commercial services as expected”. TeleAccess was supposed to have started operating on May 1, 2003. The public waited in anticipation of a company that would finally challenge the then Posts and Telecommunications Corporation’s monopoly in that sector, which was largely blamed for poor service delivery. Their wait and hope were in vain.

Even at a time when it was apparent that his company did not have the wherewithal to roll out a single line, Shumba put on a brave face hoping that his dream would be realised.

The situation on the ground was not encouraging. Apart from the 112 000 lines that he claims to have at a small sub-base station at the Central Film Laboratories in Newlands, TeleAccess had very little to show that there was an imminent major roll out since it got the licence three years ago except for a few vehicles bearing the company’s livery.

A trench dug to lay the duct for network wires from the base behind Newlands shopping centre did not proceed beyond the corner of Enterprise Road and Samora Machel Avenue.

Shumba has also not been entirely honest about the progress on the network.

When asked on the progress of his project, Shumba was never short of excuses to explain the delay.

When he ran out of excuses he would launch tirades at reporters, accusing the media of trying to destroy his dream. The Zimbabwe Independent was the major culprit in this endeavour, according to him.

At a meeting with the Independent in June last year, Shumba said he had finally solved his funding problems and that the phones would be ringing two months later in August.

At that time he said he was organising a visa to travel to Canada with his financial advisor and officials from the Ministry of Transport and Communications.

“We have made arrangements to meet our financiers in Canada to seal the funding deal,” Shumba said, beaming with confidence.

“We will then take the agreement to the equipment suppliers who I must say are ready to supply.”

That was the last time Shumba mentioned the Canadian financiers. The Independent later discovered that while he indeed flew out of Zimbabwe, he did not travel beyond South Africa.

He kept changing tack about his progress but the network remained stuck in the mud.

In September 2004 Shumba said he had bought some state-of-the-art switching equipment which he had stored at BB House (Corner Leopold Takawira and Samora Machel), the place he said would be his company’s headquarters.

He however said the network was being delayed by Potraz which had not allocated his company numbers for its system.

Potraz however consistently said it was being made a scapegoat for TeleAccess’s failure to roll out its network.

After barely surviving the choke by high rentals and rates at his headquarters at Kopje Plaza (14th and 15th floors), Shumba moved some departments to BB House where he said the new switching equipment was located.

But he still struggled to pay the rentals at BB House and was involved in a legal fight with the tenants who wanted to evict him from the building.

His debt to the Commercial Bank of Zimbabwe was running at $150 billion.

Workers’ salaries were constantly delayed with some engineers he had lured from Tel*One leaving in frustration.

Between August and December last year Shumba lost six senior executives, engineers and the whole public relations department.

Commenting on the CBZ debt, Shumba said things were under control as he had $17 billion in his current accounts, a hotel and other properties to pay it.

He said apart from the assets, he held “a licence to a business worth millions of US dollars so the bank overdraft is not a problem once we start operating”.

He however did not mention that neither the $17 billion nor his immovable properties, including King’s Haven Hotel in Avondale, were not registered under TeleAccess.

In June this year Shumba sold another dummy to the media. He said his company was going to have a private placement to raise $150 billion, coincidentally, the same amount owed to CBZ. Despite promises to come back to the market when the placement was over, the results were never made public. TeleAccess’ public consultant later said the private placement had been extended “due to the sudden change in the exchange rate”.

Despite these challenges, Shumba could still afford to extend his dream beyond Zimbabwe’s borders. He established TeleAccess Global Corporation in South Africa but constituted it in Mauritius as a launch-pad into the international telecoms industry. Even though the company was a non-trading entity, Shumba maintained plush offices in Sandton at 222A Rivonia Street, arguably one of the most expensive addresses in Johannesburg.

Perhaps one of the major causes of Shumba’s downfall is the decision to go it alone in the mould of the late maverick businessman Roger Boka. He flatly refused to invite other investors to help fund the project which was clearly beyond his capacity.

The other main cause of his fall is that he kept ducking his real problems. He was trying to establish a business which required foreign currency in a country that had lost all lines of credit.

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