HomeBusinessParly ratifies US$45m loan for NetOne

Parly ratifies US$45m loan for NetOne

PARLIAMENT on Wednesday ratified the US$45 million loan from the Import Export Bank of China for NetOne’s second (2G) and third generation (3G) network rollout project set to transform the information communication technology (ICT) industry in the country through connection of the Zimbabwean optic fibre-network to the undersea cable in the Mozambican channel.

Minister of Finance Tendai Biti moved the motion for the ratification of the loan that was contracted on June 1 in Harare between the government and the Chinese bank.
The loan has a grace period of five years during which period only the interest and no principal is payable by the borrower to the lender, and goods, technologies and services to be purchased by the proceeds of the loan should preferably come from China.
Biti urged parliament to ratify the loan saying it was good for the nation which  still lags behind in technological advancement when compared to the region and the world.
The minister said: “Zimbabwe is 23 years behind in technological infrastructure development. The loan will enable us to increase capacity to move to third and fourth generation phone technology (3G and 4G). The country’s use of ICT leaves a lot to be desired. There are only 371 000 fixed telephone lines serving only 3% of the population while only 1,4 million people have access to the Internet. We are ranked 132 out of 135 on the World Economic Forum Global Competitiveness on Report on technology readiness.
“A 10% increase in mobile phone use will increase the country’s Gross Domestic Product by 1%. The loan will enable us to put in infrastructure that will increase Internet users to five million. Latest statistics from Zimstat say that transport and communication contributed 15% percent of the country’s GDP, only second to agriculture.”
The minister reassured parliament that the loan would not be abused as in the past because of the manner in which the agreement was structured.
“Huawei Technologies of China will manage and implement the roll out project. This project will have maximum impact on the rural communities. NetOne will only be a partner in the project but will not have direct access to the resources,” the minister said.
The loan is also expected to put NetOne on a good footing to compete against its main competitors locally. Econet leads the pack in subscribers with a massive 4,1 million subscribers, followed by Telecel with 1,27million  and lastly NetOne with 1,1 million subscribers.
Biti said the government was considering offers from international companies that were willing to become strategic partners to NetOne when it is finally privatised in the near future.
“The cabinet has agreed on privatising state telecoms utility. Privatisation is on course and I cannot mention the potential suitors now suffice to say some big players on the continent are sniffing around,” he said.
Business speculation is rife that the leading contenders for NetOne’s stake are continental communication conglomerates, MTN and Vodacom of South Africa.
Meanwhile, Econet Wireless launched a nationwide broadband service after unveiling a US$100 million network covering the country’s major cities.
The network uses the latest 3G and WiMax technology, and is linked together by a fibre optic transmission system, with satellite back-up to ensure reliability.
Econet Wireless CEO Douglas Mboweni said Econet Broadband was the most ambitious project undertaken by the company since its launch in 1998, adding that broadband would play a pivotal role in the reconstruction of Zimbabwe’s economy.

Paidamoyo Muzulu

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