POWERTEL Communications (PowerTel), a telecoms unit of State-owned power utility Zesa Holdings, could be close to securing $100 million vendor financing from China Eximbank as the firm embarks on a network expansion programme, the company has announced.
In an interview, the company’s managing director Patrick Farai Chivaura said PowerTel had been expanding using internal resources and 20 base stations had already been installed.
He added that the communications company was now working with the government to process the securing of the funds.
Vendor financing is a loan from one company to another, that is used to buy goods from the company providing the loan.
“We need $100 million and have already started the process and we are working with the Transport, Communication and Infrastructural Development ministry. We have already done a presentation to the ministry and it has been accepted. Our ministry will make representation to the Finance ministry,” Chivaura said.
“We need government guarantees and the vendors have already been identified. We have already started working with them. The process takes up to a year.”
PowerTel has a 50% wholesale market share for corporate customers, while the company is yet to establish a strong foothold for individual customers. “We want money to expand the consumer-facing products such as 3G mobile telecommunications technology and voice services,” he added.
He said the communications company would next month launch a new billing system following the installation and the configuration of the new system.
“This will enable us to provide small amounts to customers as we were using the flat rate and interconnection will now be possible. The quality of service and coverage will improve through the new billing system,” he said.
Zesa Holdings chief executive officer Josh Chifamba in February told the Parliamentary Portfolio Committee on State Enterprises that although PowerTel was not a core business, the group had no immediate plans to sell the business despite cut-throat competition in the telecoms sector.
He said PowerTel required more funding to grow its market share.