Clients owe TelOne ZW$500m in bills

STATE-OWNED telecommunications concern TelOne is owed more than ZW$500 million by, among others, government entities and has adopted various measures, including litigation and blacklisting debtors to recover what it is owed.

Kudzai Kuwaza

In an interview with businessdigest, TelOne managing director Chipo Mtasa said the telecomms company has gone on an aggressive drive to collect the ZW$500 million.

“We are currently owed just over ZW$500 million from outstanding telephone bills by our clients, mostly government, parastatals, corporates and individuals. We have intensified efforts to collect all outstanding debts owed by clients and have been forced to take drastic measures such as introducing litigation and blacklisting bad debtors where necessary,” Mtasa said.

“We are pleased that these efforts and engagements, especially with government, have made some impact with government having already made a payment plan toward which they have made a ZW$30 million payment recently.”

Mtasa said the company has transferred most of its clients to a pre-paid platform to reduce credit risk.“Furthermore, we have also been migrating defaulting clients, mostly residential and small and medium enterprises to pre-paid in order to limit the company’s exposure to credit risk and the resultant adverse impact on cashflows,” she said. “To date, 90% of the total residential market has been migrated to pre-paid.”

Mtasa said the failure by clients to settle bills is having an adverse effect on the company.“Delayed settlement by debtors continues to have a negative impact on the company’s ability to settle critical statutory and contractual obligations,” she explained. “While mindful of economic challenges being experienced by the country and our clients mainly due to lockdown and Covid-19, we continue to implore on all clients to settle their debts to allow TelOne to provide the quality services that our valued clientele expect and deserve.”

On the vandalism that has affected the company’s network, Mtasa revealed that the criminal acts remain a major challenge.“Network vandalism remains one of the biggest threats to the quality of experience for our clients. In 2019, we had a total of 303 live network incidents and 114 arrests, while as at May 2020 we have had 139 incidents and 60 arrests,” she said. “While efforts are being made to improve our client experience, the business continues to suffer setbacks, resulting from network vandalism. In the short term, we have alarmed our network and increased manning levels by physical security guards. While this brings some relief, on the whole the network thieves continue to advance their own tactics hence our strategic focus in the medium to long-term is to gradually replace copper with fibre which is less prone to vandalism.”

TelOne is one of the state entities earmarked for privatisation.Finance minister Mthuli Ncube told businessdigest last year that there has been progress on that front.

“Initially we wanted to privatise these (TelOne and mobile network operator NetOne) as separate entities then we decided to do them as a package so we had to get an adviser for both transactions as one and that step takes quite a while,” Ncube said. “The financial adviser is receiving interested parties who want to invest. We are making progress.”

l Read the full TelOne interview in next week’s issue of the Zimbabwe Independent.

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