HomeEntertainmentStruggling NetOne seeks strategic partner

It’s a Weird World

 

Below are excerpts from the interview:

FZ: We gather NetOne recently approached government seeking US$40 million for its expansion programme. This is despite having got US$45 million from China. What is happening at the company and why is it continuously seeking finance from government?

NG: NetOne did not approach government for loans. However, NetOne sought approval from government to borrow from the financial market. The reason for the borrowing was basically for the expansion and upgrading exercise currently being carried out by NetOne. Recent technological advances have helped to transform the industry in many countries. The communications sector is in continuous expansion worldwide, thus the need to continuously expand the operations of NetOne.

FZ: What is being done to revamp NetOne operations which are very poor?

NG: The term of office for the board is coming to an end; thus the new board will have a mandate to look into NetOne’s capacity in terms of infrastructure, equipment and human resource. NetOne is currently on an expansion drive which will see it advancing in terms of technology and service provision. As a government institution, NetOne has lower rates than its competitors. The competitors are basically profit geared hence they charge higher rates.

FZ: What happened to the proposed MTN strategic partnership deal with NetOne?

NG: In order to realise the full potential of the network through further expansion, NetOne is currently scouting for a strategic partner to increase its capitalisation. This will enable NetOne to expand its network to all areas of Zimbabwe and beyond and also introduce new services. The MTN possible strategic partnership deal is still under discussion. Government is also in discussions with other possible strategic partners so as to have a comparative schedule of the offers before settling for one.

FZ: Still with cellular phone companies, why did the ministry block Econet’s installation of fibre optic cable to Mozambique?

NG: Government policy is that service providers must not compete for the provision of infrastructure but on the provision of services. It is also government policy that the public sector must provide infrastructure such as national backbone and mobile cellular companies ride on the infrastructure. That service is already being provided by TelOne which is connected to the undersea cable in Mozambique. Therefore it would not have made business sense to have another company providing the same service.

FZ: What are your views on cellular companies competing in putting infrastructure such as base stations to ensure expansion before they could guarantee good service delivery?

NG: Telecoms companies in our country are in a position to share the current infrastructure and the regulations provide for them to voluntarily agree on rentals. Unfortunately, this is not the case. The companies are competing on infrastructural development at the expense of service provision.  As alluded to earlier, government policy is that companies should share the infrastructure so that they can enhance the provision of services. We are already persuading these service providers to share infrastructure through the universal services fund. Cellular companies should compete on service provision rather than on infrastructure.

FZ: Your ministry is also in charge of the country’s roads. People are complaining about the bad roads countrywide. What are you doing about the problem?

NG: It pains me that our roads are in a bad state as I am also a frequent road-user. The reason for this so many years we have failed to maintain them as we should due to lack of funds. As you know we have been greatly affected as a nation through sanctions for the past 12 years. A road’s design lifespan is normally 20 years but our roads have exceeded that but we still drive day and night on the same strained roads and this means more damage to them. Roads need huge capital injection if you are to maintain them in a trafficable state. Now our roads are in such bad condition and have become more expensive to maintain.

Money collected on the country’s toll gates is used on the maintenance of trunk roads which are the state highways. We have about 18 400km of road that needs rehabilitation. The same money is used for routine maintenance on the same state highways. Furthermore, current tolling stations need maintenance and it is the same money used for that. So the money is just not enough, which is why we have decided to go to the Public/Private Partnership Programme as a route of sourcing funds.

I would say, through Zinara and the critical role it continues to play in the sector, we will continue to be steadfast with this route until all our roads reach the international levels we always talk about. For instance, in 2011 Zinara disbursed funds to road authorities for routine and periodic maintenance as follows;
Department of  Roads US$13 million; District Development Fund US$2 651 645; Urban Councils US$5 970 739; Rural District Councils US$20 611 359; Harare $2 650 000. The total was US$45 833 743.

FZ: The roads in Harare are really in a bad state and have potholes all over. What support is Zinara giving to city councils on road maintenance? 

NG: Harare City Council as a road authority receives funds from Zinara for the maintenance of its road network. Of all urban councils, Harare receives the highest allocation. For the year 2011, Zinara disbursed US$3,6 million to Harare City Council and this year Zinara has allocated US$5 million for Harare City Council. Therefore, government, through Zinara, is giving a lot of support to urban councils in general, and Harare in particular.

FZ: Your ministry has also embarked on several road projects which seem to have stalled. Please brief us on what is happening to the dualisation projects, for example Harare-Bulawayo, Harare-Masvingo, Bulawayo-Beitbridge and also the Bulawayo-Nkayi Road. Why have these projects stalled?

NG: The Harare-Masvingo and Harare-Bulawayo dualisation pro-jects started a long time ago during the Zim-dollar era. Due to financial challenges no meaningful progress was made. In 2009 my ministry decided that since government accepted the policy of PPP’s, the projects should be completed up to Skyline and Norton respectively. If partners were found they would then complete the projects.

 

Through funds being provided by the Ministry of Finance through PSIP some projects should be complete in three months. This includes Mukuvisi Bridge on the Harare-Masvingo road and Manyame Bridge on the Harare-Bulawayo road. We also have other projects like Wedza-Sadza road construction; and bridge construction projects on Little Sebakwe, Nyahodi, and Munyati. There are also bridges under tendering for Birchenough, Runde and Tuli. Diminishing …. have forced us to shelve some projects for now.

LAST week Transport and Communications minister Nicholas Goche (NG) told the Zimbabwe Independent the national flag carrier Air Zimbabwe would be unbundled into two entities — Air Zimbabwe (Pvt) Ltd and the National Handling Services (Pvt) Ltd. This week Goche speaks to our Senior Political Editor Faith Zaba (FZ) about cellular networks and the state of the country’s roads, among other issues. Below are excerpts from the interview:
FZ: We gather NetOne recently approached government seeking US$40 million for its expansion programme. This is despite having got US$45 million from China. What is happening at the company and why is it continuously seeking finance from government?
NG: NetOne did not approach government for loans. However, NetOne sought approval from government to borrow from the financial market. The reason for the borrowing was basically for the expansion and upgrading exercise currently being carried out by NetOne. Recent technological advances have helped to transform the industry in many countries. The communications sector is in continuous expansion worldwide, thus the need to continuously expand the operations of NetOne.
FZ: What is being done to revamp NetOne operations which are very poor?
NG: The term of office for the board is coming to an end; thus the new board will have a mandate to look into NetOne’s capacity in terms of infrastructure, equipment and human resource. NetOne is currently on an expansion drive which will see it advancing in terms of technology and service provision. As a government institution, NetOne has lower rates than its competitors. The competitors are basically profit geared hence they charge higher rates.
FZ: What happened to the proposed MTN strategic partnership deal with NetOne?
NG: In order to realise the full potential of the network through further expansion, NetOne is currently scouting for a strategic partner to increase its capitalisation. This will enable NetOne to expand its network to all areas of Zimbabwe and beyond and also introduce new services. The MTN possible strategic partnership deal is still under discussion. Government is also in discussions with other possible strategic partners so as to have a comparative schedule of the offers before settling for one.
FZ: Still with cellular phone companies, why did the ministry block Econet’s installation of fibre optic cable to Mozambique?
NG: Government policy is that service providers must not compete for the provision of infrastructure but on the provision of services. It is also government policy that the public sector must provide infrastructure such as national backbone and mobile cellular companies ride on the infrastructure. That service is already being provided by TelOne which is connected to the undersea cable in Mozambique. Therefore it would not have made business sense to have another company providing the same service.
FZ: What are your views on cellular companies competing in putting infrastructure such as base stations to ensure expansion before they could guarantee good service delivery?
NG: Telecoms companies in our country are in a position to share the current infrastructure and the regulations provide for them to voluntarily agree on rentals. Unfortunately, this is not the case. The companies are competing on infrastructural development at the expense of service provision.  As alluded to earlier, government policy is that companies should share the infrastructure so that they can enhance the provision of services. We are already persuading these service providers to share infrastructure through the universal services fund. Cellular companies should compete on service provision rather than on infrastructure.
FZ: Your ministry is also in charge of the country’s roads. People are complaining about the bad roads countrywide. What are you doing about the problem?
NG: It pains me that our roads are in a bad state as I am also a frequent road-user. The reason for this so many years we have failed to maintain them as we should due to lack of funds. As you know we have been greatly affected as a nation through sanctions for the past 12 years. A road’s design lifespan is normally 20 years but our roads have exceeded that but we still drive day and night on the same strained roads and this means more damage to them. Roads need huge capital injection if you are to maintain them in a trafficable state. Now our roads are in such bad condition and have become more expensive to maintain.
Money collected on the country’s toll gates is used on the maintenance of trunk roads which are the state highways. We have about 18 400km of road that needs rehabilitation. The same money is used for routine maintenance on the same state highways. Furthermore, current tolling stations need maintenance and it is the same money used for that. So the money is just not enough, which is why we have decided to go to the Public/Private Partnership Programme as a route of sourcing funds.
I would say, through Zinara and the critical role it continues to play in the sector, we will continue to be steadfast with this route until all our roads reach the international levels we always talk about. For instance, in 2011 Zinara disbursed funds to road authorities for routine and periodic maintenance as follows;
Department of  Roads US$13 million; District Development Fund US$2 651 645; Urban Councils US$5 970 739; Rural District Councils US$20 611 359; Harare $2 650 000. The total was US$45 833 743.
FZ: The roads in Harare are really in a bad state and have potholes all over. What support is Zinara giving to city councils on road maintenance? 
NG: Harare City Council as a road authority receives funds from Zinara for the maintenance of its road network. Of all urban councils, Harare receives the highest allocation. For the year 2011, Zinara disbursed US$3,6 million to Harare City Council and this year Zinara has allocated US$5 million for Harare City Council. Therefore, government, through Zinara, is giving a lot of support to urban councils in general, and Harare in particular.
FZ: Your ministry has also embarked on several road projects which seem to have stalled. Please brief us on what is happening to the dualisation projects, for example Harare-Bulawayo, Harare-Masvingo, Bulawayo-Beitbridge and also the Bulawayo-Nkayi Road. Why have these projects stalled?
NG: The Harare-Masvingo and Harare-Bulawayo dualisation pro-jects started a long time ago during the Zim-dollar era. Due to financial challenges no meaningful progress was made. In 2009 my ministry decided that since government accepted the policy of PPP’s, the projects should be completed up to Skyline and Norton respectively. If partners were found they would then complete the projects. Through funds being provided by the Ministry of Finance through PSIP some projects should be complete in three months. This includes Mukuvisi Bridge on the Harare-Masvingo road and Manyame Bridge on the Harare-Bulawayo road. We also have other projects like Wedza-Sadza road construction; and bridge construction projects on Little Sebakwe, Nyahodi, and Munyati. There are also bridges under tendering for Birchenough, Runde and Tuli. Diminishing …. have forced us to shelve some projects for now.

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