Government is in discussions with financiers to raise $200 million to give Telecel Zimbabwe the financial muscle to compete in the sector.
BY BUSINESS REPORTER
This came after government recently injected $5 million into the country’s third largest mobile operator, following the finalisation of an acquisition of 60% stake in the telecoms firm in January.
Information and Communication Technology, Postal and Courier Services minister Supa Mandiwanzira told guests at Telecel’s cocktail briefing on Wednesday that the company’s future was secured.
“Shareholders and the Telecel team are working diligently to secure additional funding in order to recapitalise the organisation and ensure that Telecel competes effectively in the telecommunication industry. At this stage, negotiations and discussions are ongoing with financiers for an investment of over $200 million to kick-start the Telecel project,” Mandiwanzira said, adding that more details would be released in due course.
“This funding will go a long way in ensuring that the company rolls out new technologies to meet subscriber needs. I am aware that the company has already commenced the network upgrades necessary to close the identified and well-known gaps in its service provision and will also be rolling out its 4.5G LTE infrastructure by the third quarter of 2017.”
The sector has seen cut-throat competition despite being capital intensive.
Last year, government announced that ZARNet had bought the 60% stake in Telecel Zimbabwe from Global Telecom Holding SAE, a subsidiary of VimpelCom Ltd.
The remaining 40% equity in Telecel is held by Empowerment Corporation, a consortium of local empowerment groupings.
Mandiwanzira said efforts were underway to sanitise the “shareholder wars” and eventually make the business private through listing or selling, adding that financial advisors would advise government on the best route to take.
The company has never known peace due to constant bickering among its local shareholders which affected the growth of the operator. This has seen the mobile operator failing to pay a dividend.
Until recently, the mobile operator had also seen a high turnover in chief executive officers, killing stability as a number were shipped out before they accomplished their missions.
But current CEO Angeline Vere said Telecel was here to stay.
“Today is the day we boldly announce to the world that Telecel is here to stay, the day we announce to the world that we are 100% behind you our stakeholders and that we will continue to be the company and the brand that offers value 100% of the time,” she said at Wednesday’s briefing.