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TelOne draws down $33m from Chinese loan

Business
State-owned telecoms firm TelOne has drawn down $33 million from the China Exim Bank’s $98 million facility, as it moves to introduce more services to counter the decreasing voice revenue.

State-owned telecoms firm TelOne has drawn down $33 million from the China Exim Bank’s $98 million facility, as it moves to introduce more services to counter the decreasing voice revenue.

BY BUSINESS REPORTER

Last year, TelOne embarked on a National Broadband Project in which the company is targeting to increase broadband contribution to 48% of total revenue by 2020, up from the current 20%.

This came as telecom firms have seen a drop in revenue due to the rise in over-the-top services like WhatsApp and Viber, which have resulted in a decline in voice calls.

The company sees voice revenue contributing 43% to total revenue from 66%. TelOne will also bring in new product lines such as cloud services and value-added services, as the business model transforms to converged information and communications technology (ICT) services.

This deliberate transition from a purely fixed voice business to becoming a fixed mobile converged company with an emphasis on broadband, cloud and digital services is expected to see the company return to profitability within the next two years, TelOne said.

The National Broadband Project was supposed to start in 2014, but began two years later due to the lengthy process of all conditions precedent for the fulfilment of the loan with China Exim Bank.

TelOne said the project implementation, which is expected to run for two years would now see the company being able to transition to a wider fibre broadband network platform, which would reverse the negative revenue trend and drive profits to $17 million by 2020.

According to TelOne’s transformation blueprint, the company will breakeven next year from losses in 2016 and 2017 as the $98 million project begins to bear fruit.