TelOne owed more than US$22 million to mobile operators in interconnection fees, acting managing director Hampton Mhlanga told the Parliamentary Committee on Media, Information and Communication Technology last Thursday. Interconnection fees are paid between operators to allow cross-network calls.
Mhlanga also revealed the damage caused by a Cabinet decision to force TelOne to slash its tariffs earlier in the year. According to Mhlanga, the directive had plunged the parastatal deeper into debt. Its obligations to other telecoms operators and the Zimbabwe Revenue Authority had ballooned following the directive, Mhlanga told the committee.
Gift Chimanikire, chair of the committee, asked Mhlanga whether the mounting interconnection debt had been the reason TelOne customers had found it difficult to get through to mobile networks.
Mhlanga replied: “There was a time that the liabilities increased so much that we took a business decision, as the amount we owed had kept on growing. Therefore, we were not allowing 100% of calls to mobile operators, especially to Econet, so that we reduce our liability.
“However, we have since had discussion with the operators, and we said to them, we will pay you 10% of our collections, until such a time as we are able to collect 100%.”
This is the first time TelOne has publicly admitted to having barred calls from its own customers to Econet and other mobile operators.
Under the interconnection arrangement between telecommunications operators, operators pay each other for traffic between their networks. For instance, if a TelOne customer calls a mobile operator, TelOne pays that operator seven cents per minute. Because Econet is the largest operator, with over 2 million subscribers compared to TelOne’s 300 000, most of the outbound traffic from TelOne is heading into Econet. This means its interconnection obligations to Econet and other operators, who are expanding their subscriber bases, were always rising.
Mhlanga also revealed the company had been collecting only about 15% of its bills from customers, yet the Zimbabwe Revenue Authority demands tax returns to be based on what the company bills, and not what it actually collects.
In a statement TelOne said it would resume disconnection of services to some of its defaulting customers as from 1 December. “TelOne would like to remind its valued customers to settle their revised bills in full. This is in order to avoid inconveniences that may arise from service termination, which would be resumed in earnest.
“Kindly note that with effect from 1 December TelOne will not hesitate to re-allocate to those on the waiting list telephone lines of customers whose arrears are in excess of 90 days past due as well as those who have defaulted on the agreed payment plans,” said the company. TelOne further warned the defaulters that the company was considering taking legal action against them if they failed to pay the billed amounts.
“Legal action will be taken to recover all outstanding amounts that are over 120 days and legal cost will be for the accounts of debtors,” it said.
TelOne said it would use part of the funds to revamp some of its equipment which was either vandalised or is now dilapidated to improve its service provisions.
“We also take this opportunity to advise that service will soon be restored to customers in areas where cables were either stolen or vandalised and that replacement cables are being purchased,” the company said.
Paul Nyakazeya/Chris Muronzi