HomeLocal NewsTelecel, govt clash over licence

Telecel, govt clash over licence

ZIMBABWE’S third largest mobile operator, Telecel Zimbabwe (Telecel), is on a collision course with Information Communication Technology, Postal and Courier Services minister Supa Mandiwanzira on the status of its operating licence, information at hand shows.

Taurai Mangudhla

Telecel says contrary to Mandiwanzira’s claims the company faces withdrawal of its licence over non-payment of licence fees, the mobile operator’s licence fees are up to date in terms of the schedule agreed with the Postal and Telecommunications Regulation Authority of Zimbabwe (Potraz).

“It is normal international practice to pay licence fees annually. Telecel is fully compliant with all due payments to date, as per the agreed payment terms set out by the Zimbabwean government,” said Telecel communications and branding director, Obert Mandimika, in a letter to the Zimbabwe Independent.

Efforts to get comment from Mandiwanzira were fruitless. The minister on Wednesday evening requested for more time to prepare his response and promised to reply by yesterday morning, but his mobile went unanswered. However, Information minister Jonathan Moyo yesterday said: “The payment of a licence fee to provide a mobile phone service in Zimbabwe is in terms of the Postal and Telecommunications Act and not according to whatever is meant by normal international practice. The mobile phone licence fee in Zimbabwe is a lump sum of US$137 million for 20 years. The notion of annual payments is wishful nonsense with no legal basis. From this standpoint Telecel does not have a lawful licence and everyone concerned knows this legal position which is now being implemented in full by government without fear or favour.”

Mandimika also disputed claims by highly-placed sources in government and insiders that the mobile operator is under threat from internal problems, including losing millions in 5% annual management fees to foreign shareholders that have left the operator flirting with insolvency.

The problems are said to have left Telecel running on a US$500 000 bank overdraft with no ability to meet short and long-term liabilities.

“The company has positive income and is meeting all its financial obligations within the country (and) the business generates revenues and Ebitda (earnings before interest, taxes, depreciation, and amortisation) in line with international peers with similar market positions, investment and growth profiles,” Mandimika said without providing specific figures.

“Telecel’s profitability is in line with international peers with similar market positions, investment and growth profile. The company has a healthy asset base and very limited financial debt to vendors and banks. It is honouring all its financial obligations within Zimbabwe, in line with mutually agreed timeframes with all relevant parties.”

Since its inception in 1998, Telecel has gone through major changes in shareholding, a development believed to have retarded stability and long term planning.

Mandimika said since VimpelCom became a shareholder in 2011, the company’s management fees have been accrued on Telecel’s balance sheet as the shareholder’s focus has been on re-investment into the organisation in order to drive its own growth and further investment in Zimbabwe.

He said Telecel has re-invested US$237 million into the expansion of Zimbabwe’s mobile infrastructure and its services portfolio since 2009, and operates an annual corporate social responsibility budget of US$700 000. As reported by the Independent, political vultures are circling over Telecel, amid strong indications Angolan President Jose Eduardo dos Santos’ daughter Isabel’s company, Unitel S.A, is keen to take over the local firm despite veiled resistance in the corridors of power in Harare. Africa’s largest telecoms company, MTN of South Africa has also been linked to the Telecel takeover.

President Robert Mugabe’s nephew Patrick Zhuwao has been at the centre of the Telecel storm, pushing to land the position of CEO of the company amid indications he is part of a consortium angling to seize control of the contentious 40% local equity.

Recent Posts

Stories you will enjoy

Recommended reading