Reports from Zimbabwe suggest that the government has made a move to take over a majority stake in struggling mobile operator Telecel. The Zimbabwe Independent writes that the deal will be carried out via state-owned ISP Zarnet, with support from the government pension fund, the National Social Security Authority (NSSA). The report says that Zarnet has agreed to pay USD40 million for Amsterdam-based Vimpelcom’s 60% stake and the assumption of Telecel’s debt, which totals around USD80 million to USD100 million.
The NSSA is thought to be fronting the money for Zarnet, and if the cash-strapped ISP fails to make the required repayments then the NSSA will assume control of the majority interest in Telecel. The government is hoping to take full control of Telecel by also buying out 40% shareholder Empowerment Corp (EC), which is a consortium of local investors, though negotiations are said to have stalled due to EC’s valuation of its stake. While there has been no official confirmation from any of the parties involved, the Independent writes that it ‘has it on good authority that the deal has been closed’.
Telecel has been under fire for some time over problems with its mobile licence renewal payments and also its ownership structure, with Zimbabwean law requiring the country’s telcos to be at least 51% domestically owned. The operator lost second position in the wireless market to state-owned NetOne in 2014, and claimed around two million subscribers by the end of June 2015, according to TeleGeography’s GlobalComms Database, behind NetOne’s 3.2 million and Econet’s 6.7 million.