HomeLocal News‘Privatising parastatals will bring opportunities’

‘Privatising parastatals will bring opportunities’


THE Parliamentary Portfolio Committee on Information Communication Technology says government’s plan to privatise parastatals such as TelOne, NetOne, Zarnet and Telecel will bring new opportunities for growth for the entities, some of which were loss making.


Charlton Hwende

In their report of the ICT industry, the committee led by Kuwadzana East MP Charlton Hwende (MDC Alliance) said government’s plans to privatise NetOne and Telecel, as well as to partially privatise TelOne and Zarnet will ensure that these entities were run more profitably with less strain on the fiscus.

TelOne was said to be performing well above expectations with revenue increasing from $114 million in 2016 to $117 million in 2017 and profits having increased from $14 million to $20 million.

“In light of this, the plan by government for partial privatisation of TelOne is expected to bring new opportunities for growth, with anticipation for a positive outlook in terms of revenue, profit as well as debt management, and all these buoyed by broadband and over the top (OTT) services,” the committee said.

However, NetOne was said to be facing operational challenges after declaring a $57 million loss in the 2017 financial year.

“For the 2018 financial year, NetOne expects to make profit. As at October 31 2018, NetOne reported a profit of $14,9 million after cost containment strategies were put in place.

“While voice revenue is declining, it is the data revenue which will be the driver of these profits. In addition, future performance is expected to markedly improve due to the pending privatisation of NetOne,” the committee said.

MPs said privatisation of parastatals will also ensure that appointment of board members was merit-based and became the prerogative of shareholders as opposed to being selected by ministers.

“The goal of shareholders will be profit maximisation unlike the case of parastatals where boards are selected using the ministers’ preference, which may have associated biases.”

On Zimpost, the committee said post offices were targeted for purposes of housing community information centres (CICs) which were meant to assist citizens to access ICTs from a network of about 230 post offices countrywide.

“CICs will go a long way in reviving the service of post offices, albeit in a modern format. Fully-fledged CICs consist of an Internet café, reprographic unit, bindery as well as a gaming section. Currently, the ICT ministry has been able to roll out 145 CICs across the country and its target is to have CICs in all the 230 post offices,” the committee report said.

On Zarnet, the ICT committee said they needed support from the fiscus as they faced operational challenges.

The committee also said government should bring finality to the acquisition of Telecel as it still remained unresolved.

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