Zimbabwe used USF to help buy Telecel stake

7 Feb 2017

The government of Zimbabwe has admitted using the country’s Universal Services Fund (USF) to part-finance its acquisition of a 60% stake in local mobile operator Telecel. According to a report from TechZim, ICT Minister Supa Mandiwanzira told a parliamentary hearing that the USF paid USD10 million of the USD40 million cost of the shares on behalf of state-run ISP Zarnet, which is being used as a vehicle to assume ownership of Telecel. The remaining USD30 million was put up by the government pension fund, the National Social Security Authority (NSSA), though the Authority has said it is looking to see its investment repaid by Zarnet within three years. The 60% stake in Telecel was bought from companies controlled by VimpelCom.

Zimbabwe’s USF was established to pay for network deployment and expansion in unserved and underserved areas of the country, particularly rural regions, though the government maintains that the Fund has the right to make an equity investment in any company. Privately-owned mobile market leader Econet Wireless has been critical of government involvement in the cellular sector, with the state now controlling both of its rivals, Telecel and NetOne. It has complained of unfair practices with regards to licence fee payments and contributions to the USF.

Zimbabwe, Econet Wireless Zimbabwe (incl. ZOL, Liquid Telecom), Telecel Zimbabwe