Foreign suppliers threaten TelOne services over $18m debt

STATE-OWNED telecoms operator, TelOne, has been threatened with service disruption by critical foreign suppliers, who include West Indian Ocean Cable Company (Wiocc) and China-EximBank, among others, over an $18 million debt.


According to a report from the chairperson of the Parliamentary Portfolio Committee on Information Communication Technology, Postal and Courier Services, Charlton Hwende, TelOne owes four critical foreign suppliers about $18 million.

“TelOne has been threatened with service disruption from critical foreign suppliers, who include Wiocc, TDM Mozambique, TCF and China-EximBank, who are owed $18 million,” the report said.

TelOne owes China-EximBank $500 000 in interest and repayment on the $98 million loan facility which funded the phase 1 National Broadband Project (NBBP).

“This arrear obligation is affecting plans for phase 2 of the National Broadband Project, which is set to expand and upgrade TelOne’s network,” Hwende said.

“Any disruptions of internet service by TelOne will have a catastrophic impact on government business and the economy at large. Such a disruption will have a damning effect on the country’s communications systems, national security, TelOne’s reputation and the effect on the economy at large cannot be overemphasised,” he said.

Hwende said if the challenges are not addressed, there would be lost revenue of more than $20 million, as there would be no materials to complete connections.

The committee recommended government to prioritise foreign currency allocations to the telecoms sector and TelOne, in particular, being the national carrier.

Hwende said TelOne’s balance sheet was in a technical insolvency position due to legacy loans of $380 million, which were inherited from the Post and Telecommunications Corporation era.

“The legacy loans are affecting the partial privatisation programme as the company may fail to attract investors due to the legacy loans and the resultant technically insolvent balance sheet. Company profitability continues to be eroded by exchange losses and loan interest arising on these loans,” he said.

“The company balance sheet is unattractive to investors as a result of these loans and this may have an impact on the company’s partial privatisation plans. Profitability will continue to be eroded by the legacy loan interest and exchange differences.”

Hwende said government debtors of $98 million contribute 58% of the company net debtors’ book. Government owes TelOne $73 million, while parastatals owe $25 million.

“This is leading to crippling liquidity problems for TelOne, as the company is now failing to service local creditors such as Zimra [Zimbabwe Revenue Authority], Potraz [Postal and Telecommunications Regulatory Authority of Zimbabwe], interconnect partners and pension fund. Business operations are being seriously threatened as a result of resultant liquidity problems,” he said.

Hwende said TelOne has been charged $10,9 million in penalties and interest by Zimra despite government owing TelOne more.

“Company profitability is compromised. TelOne would approach breaking even without these costs,” he said.

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  1. if you can comprehend the loss that service disruption will cause on the nation over debt…why can’t you comprehend the losses citizen whose property is being attached b city council over arrears? if a state owned enterprise is in debt and failing to pay it off because of obvious reasons….how do you expect its citizenry to pay off their debts as well? exercise the same leniency on us that you are begging for from you creditors!

  2. Bvisai chiRadio chenyu chinongorira tisina kuchitungidza. And it’s difficult to find on the web page. It’s RUDE MHANI!!! How can you force readers to listen to your radio??? Chinonyangadza!!! You have really made your website so unattractive because of that silly radio. When one opens you site, first he has to scroll down and turn it off and for every subsequent page he opens, e has to do the same. Do you even know that many of your visitors will be in offices??? You are very crazy people!!!

    1. sure it must be removed, at least they must put it on the header where it can be easily disabled. Auto play is a no

  3. オプトアウト | 株式会社fluct

  4. Tel one just needs to be privatized

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