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Telecel saga deepens

Telecel Zimbabwe, the third largest mobile operator in the country, has been paying licence fees in installments after striking a deal to settle the dues in seven years, Standardbusiness heard last week.


Telecel was in the eye of a storm recently after government announced that it had begun processes to shut down the mobile operator because it was operating without a licence and had failed to regularise its shareholding in line with the empowerment regulations.

Telecel is 60% owned by Telecel Globe — a subsidiary of Orascom Telecom — and the remainder is held by Empowerment Corporation, a consortium of local investors.

Sources close to the developments at Telecel Zimbabwe said the company had been meeting all its licence obligations.

“Telecel agreed with the Postal Telecommunications Authority of Zimbabwe [Potraz] on a seven-year period to pay the $137 million for the licence. It has been meeting its obligations and the money is being paid in installments,” an industry source said.

Sources said the situation had been politicised because so far nothing had been said by the regulator Potraz.

“Potraz has not said anything and Telecel is yet to receive communication from the regulator,” the source added.

Potraz renewed Telecel’s licence in 2013 after the mobile operator promised to comply with the country’s indigenisation laws.

The source said executives from Telecel Globe were in the country to negotiate with authorities after government gave Telecel up to April 6 to “clean its mess”.

The mobile operator, which recently lost the second position to NetOne in terms of subscribers, has shown serious potential to grow, but has been weighed down by shareholder disputes, particularly in Empowerment Corporation.

Telecel communications director Obert Mandimika told Standardbusiness that the mobile operator was working with government to comply with all legal provisions.

“Engagements with the government and relevant authorities are still in progress as we work towards the agreed deadline,” Mandimika said.

Mandimika said the government required that local ownership be at 51% in line with the indigenisation laws and it also required them to stick to the agreed plan to pay for the licence renewals.
“These terms have been met,” he said.

Mandimika said the company never closed and continues to communicate with its subscribers.

“We never closed and continue to be operational as we work with the government in order to comply with all legal requirements for operating in the country,” he said.

Efforts to obtain comment from Indigenisation minister Chris Mushohwe were fruitless as he was said to be attending a series of meetings on Friday.

Mushohwe chairs the Cabinet committee that is working to ensure that the mobile operator adheres to the legal provisions.
Telecel has over two million subscribers and has invested $237 million since its inception in 1998.

Despite 17 years in operation, the company has never declared a dividend, thanks to infighting among shareholders.

Last month Empowerment Corporation shareholders were up in arms with managing director Patrick Zhuwao after the former legislator tried to railroad the disposal of the outfit’s 40% shareholding in Telecel to Brainworks Capital Management.

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