Telecel Zimbabwe under increasing pressure

23 Feb 2015

The government of Zimbabwe has decided to cancel an agreement with mobile operator Telecel under which it has been allowed to operate since June 2013 without paying in full for its USD137.5 million licence, TechZim reports. While authorities stress that Telecel is not having its licence revoked completely and will not be forced to cease operations, the firm is now under increasing pressure to find new investors to replace existing shareholders Vimpelcom (60%) and Empowerment Corp (E-Corp, 40%), both of which have said they wish to offload their stakes.

For several years the government has attempted to bring Telecel into line with legislation limiting foreign ownership to 49%, but Russia-based Vimpelcom has been unable to forge an agreement with local investors, and is now looking to sell off its entire 60% interest in the cellco. A June 2013 agreement allowed Telecel some leeway with its licence payments as its owners looked to restructure the firm, but it now appears that authorities have lost patience with the operator. A report from local newspaper the Sunday Mail suggests that the government could be looking to take control of Telecel from Vimpelcom and E-Corp with a view to selling off the firm to a third party. The ownership problems at Telecel have led to a reluctance to invest in new infrastructure rollouts, and as a consequence the firm has seen subscriber numbers go into decline; it has lost second place in the market to government-owned rival NetOne, while privately-owned Econet Wireless continues to dominate the sector in terms of customer numbers.

Zimbabwe, Telecel Zimbabwe