Business struggle after SA disconnects Harare

Doing business in Zimbabwe has become even more difficult after South Africa’s telecommunications parastatal, Telkom, pulled the plug on services to the neighbouring country for outstanding debts.

Telkom SA spokeswoman Lulu Letlape refused to be drawn on Tuesday on just h

ow much was outstanding saying; “We cannot say how much the company is owed, as we do not discuss our clients with third parties, but we can confirm that Telkom has blocked its services from Zimbabwe to South Africa over a very big amount.”

Zimbabwe’s fixed line operator, TelOne, has reportedly put the sum at US$18 million ($432 billion) and said efforts were underway to honour its debt.

South Africa’s Business Day newspaper reported on Friday that TelOne had incurred the debt after Telkom had helped to upgrade Zimbabwe’s fixed network between the capital, Harare, and the South African border town of Musina a few years ago.

A company called Tele-Globe is now routing calls from Zimbabwe via Canada to South Africa.

According to sources, Telkom’s decision has thrown Zimbabwe’s telephone network into chaos, with businesses likely to be hardest hit by the inconvenience.

“This is a very serious development, as it is likely to affect up to 60 percent of business operations between the two countries. The worst-off are likely to be the companies already facing financial difficulties. Although we do have three mobile telephone networks, their coverage is fairly limited,” Harare-based economist, Denis Nikisi, said.

Zimbabwe is facing its worst economic crisis since independence in 1980, with unemployment hovering around 70 percent, triple-digit inflation and growing food shortages. A serious lack of foreign currency has led to shortage of fuel and other essential imports.

Earlier this year the South African power company, Eskom, threatened to cut off its power supply to the country as a result of unpaid bills.

The move by Telkom couldn’t have come at a worse time. Zimbabwe’s crisis is set to deteriorate with an estimated 4 million people threatened by food shortages over the next few months, on top of 700,000 affected by the government’s demolition of illegal homes and businesses in May.

One aid worker in Harare said, “It’s basically pretty bad, and it affects us when we have to deal with our (aid) partners – information sharing has been slower, as emails have been delayed. One has to wait, in some cases the whole day, to get a connection.” — IRIN