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Telecel remains profitable: Vere

MOBILE network provider Telecel Zimbabwe (Telecel), the country’s third largest in terms of subsciber base, recently appointed Angeline Vere (AV) to the position of CEO. The appointment comes amid confusion on the fate of the company’s operating licence.

Zimbabwe Independent business reporter Taurai Mangudhla (TM) interviewed Vere (AV) on a number of issues, including her strategic focus as well as the company’s licence status. Below are excerpts:

TM: You were recently appointed Telecel CEO, how long have you been employed by the company and what’s your employment history before joining Telecel?
AV: I have been with Telecel for 11 years. I joined Telecel in 2004 as the legal manager and in 2010 I was promoted to the post of company secretary and legal director.

TM: You are CEO of Telecel at a time there seems to be some confusion regarding regularisation of the company’s licence. What is the current status of your license?
AV: The current status is that Telecel has honoured the original payment plan with Potraz and by extension with the government of Zimbabwe. In fact, Telecel paid its first instalment for the year last month and is on course to pay another instalment in December 2015.

TM: There has been lack of clarity on the nature of your agreement with government, particularly on the payment terms. What are the terms?
AV: The terms between Telecel and the government are very clear as they are captured in a legally binding contractual agreement between Telecel and Potraz. The terms are that Telecel will pay its US$137,5 million operational licence through a seven-year payment plan which Telecel has been doing in line with the deadlines and timeframes as stipulated in that contract.

TM: When do you anticipate to have cleared the balance?
AV: We expect to be fully paid up by December 2020.

TM: Mobile operators are feeling the pinch of Potraz’s 35% cut on retail tariffs; what has been the impact at Telecel?
AV: Like everyone else in the industry, the 35% tariff cuts coupled with other economic factors have affected our business considerably. The immediate impact has been that we have been forced to rationalise costs across the board.
TM: Some players are cutting salaries and even pushing suppliers to reduce charges. What is your strategy to cushion yourself from the impact of the 35% tariff cut?

AV: Strategies as you will appreciate change to align themselves with the operating environment, but our approach in general has been to continue to provide affordable services and grow our subscriber base so that our profitability is from a volumes-driven business. Having said that, there are many factors apart from the 35% tariff cut and like any other business we are looking at our entire business model and operations to identify areas of improvement which can subsequently improve overall efficiency, profitability and business sustainability.

TM: I understand you intend to roll out some 75 kiosks. What is the rationale behind the move and what are your annual revenue projections per kiosk?
AV: At Telecel we are working on expanding our retail and distribution infrastructure and in doing so we have sought the assistance of community entrepreneurs to increase our retail footprint in areas where our presence has been limited through mutually beneficial partnerships which will support local business people and entrepreneurship.

TM: You previously spoke about number portability, what informed that strategy?
AV: Telecel’s Switch Over campaign is an answer to requests from potential customers who would like to join our network but are concerned about losing the identity that comes with the mobile number they have become identified with. Number matching takes care of the inconveniences of having to memorise or having to share very different mobile numbers with your contacts who are used to your old numbers.
Telecel’s number matching initiative was designed to help customers retain part of their mobile numbers although full Mobile Number Portability is yet to be introduced by the regulatory authority.

TM: What is your current subscriber base?
AV: We currently have 2,2 million active subscribers.

TM: What portion of your subscribers access mobile internet?
AV: Over 25% of our active subscribers use mobile internet on our platform.

TM: What is your average revenue per user and what was the figure for 2014?
AV: Unfortunately, our average revenue per user is information that constitutes competitive intelligence and as such that information cannot be released publicly.

TM: What is the performance of Telecash so far in terms of subscribers, revenues and agents?
AV: Telecash accounts for 1% of our total revenues. The service now has close to 6 600 agents and nearly one million subscribers.

TM: There have been reports Telecel is technically insolvent; what is the situation at the company?
AV: Telecel is not technically insolvent. The correct position is that Telecel is a going concern that remains profitable. Our ability to pay an instalment on our seven-year licence payment plan is evidence of our profitability and sustainability.

TM: Going forward, what are your immediate strategic targets as CEO and what are your long-term goals?
AV: In the short-to-long term, our main focus will be on resolving and finalising licensing and shareholding issues, introducing innovative and competitive new market offers, improving and expanding our retail and distribution infrastructure as well as optimising our network and targeting key sites to ensure 100% availability.

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