HomePoliticsNetone fails to repay US$28m loan

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THE government-owned telecommunications company, NetOne, has approached treasury to renegotiate terms for a US$28 million loan the firm got from international financiers at its inception more than a decade ago.

Reward Kangai, NetOne managing director, yesterday told the parliamentary portfolio committee on media, information and communication technology that the firm had since 2002 failed to service the debt owed to three lenders, among them Standard Chartered Bank of the United Kingdom.

The international financiers advanced capital to NetOne for its network expansion drive.

“Efforts are underway to engage the Ministry of Finance to renegotiate the repayment of those loans,” Kangai said. “Now that we are charging our customers in foreign currency, there is capacity to pay those loans.”

NetOne also recommended to government to review its policy on procurement arguing efforts by the company to keep abreast with new technologies were being outpaced by bottlenecks in the State Procurement Board.

The board is mandated to purchase supplies on behalf of government departments, parastatals and companies.

Kangai added that NetOne would be on “the same playing field with its competitors” — Econet Wireless and Telecel — if government approved the company setting up an independent procurement committee.

The procurement board, Kangai further argued, often took close to six months to procure supplies for the mobile phone company.

“NetOne should have its own procurement committee. We have a situation where control is no longer necessary…we are not a parastatal,” Kangai said. 

The NetOne boss told the legislators that subscribers to the mobile phone company on the contract service were shifting to the pre-paid platform, EasyCall, after billing problems affected the company.

NetOne has just under 500 000 subscribers.

Kangai said the company had failed to replace the obsolete billing system following a decision by the government procurement board to stop bids by prospective tenders that were seeking to upgrade the system.

The company, according to official figures released this week, is now third in terms of subscriber base after Econet and Telecel.

“That billing system is old and it needs to be replaced. It is inconsistent with new technology”, Kangai said.

On whether NetOne would get a strategic partner from South Africa, he said: “There are a lot of operators that have shown interest. Management through the board will submit recommendations through the parent ministry.”

Meanwhile, government received US$53 million from China to finance the expansion drive of the mobile phone operator currently targeting an ambitious five million subscribers by March.

In another development incoming Telecel managing director Aimable Mpore also revealed to the same parliamentary committee that the telecoms company would launch its speed-enhanced 3G technology by June after it was granted operating frequencies by the Post and Telecommunications Regulatory Authority of Zimbabwe last week.

Bernard Mpofu

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