Power utility Zesa Holdings has said it is negotiating with several potential investors to recapitalise its telecommunications unit, PowerTel Communications, through vendor financing. Vendor finance is a form of lending in which a company lends money to be used by the borrower to buy the vendor's goods or property.
Zesa chief executive officer Mr Josh Chifamba said the telecoms business was strategic, hence the need to seek funds to recapitalise it. He said the funding, if secured, would enable the firm to keep up with other competitors in the sector, including Econet Wireless and Telecel, who have invested heavily in telecommunicationS infrastructure over the last couple of years.
"PowerTel is a business that requires recapitalisation and we are talking to some partners with a view of raising vendor financing," he said.
"We are also looking at entering into synergies with companies in the sector. For example, we can partner NetOne and share infrastructure," Mr Chifamba said.
He, however, could not reveal the amount of money required to recapitalise the business.
PowerTel, one of Zesa Holdings' subsidiaries, is a registered Internet Access Provider formed in 1999.
It focuses mainly on providing data communications and infrastructure services through the use of cable wireless and power line communication technologies.
Zimbabwe's telecommunication sector has been on an upward growth trajectory following the adoption of multiple currencies in 2009 as more people gain access to mobile phones.
The demand for data services has also risen due to the availability of affordable Internet-enabled mobile phones.
Mobile teledensity in Zimbabwe now stands at over 70 percent.