7 May 2018

Mozambique: No Redundancies in TDM/Mcel Merger

Maputo — The Mozambican government's Institute for the Management of State Holdings (IGEPE) pledged on Monday that the merger between the publicly owned telecommunications companies TDM and MCel will not involve any redundancies.

TDM is the operator of the network of fixed telephone lines and has been sinking into deep financial problems as clients shift away from fixed to mobile phones. MCel, created in 1997, is the pioneer in Mozambique of mobile phone technology, but in recent years it has faced stiff competition from two other mobile phone companies, Vodacom and Movitel.

TDM has always been the major shareholder in MCel, and so there should be little difficulty in merging the two companies from a legal point of view.

IGEPE chairperson Ana Conai told reporters on Monday, during a meeting on harmonising the legislation concerning the state business sector, that the merger should be finalised by the end of the year.

"We don't like to talk about redundancies in the companies", she said. "We shall restructure the companies and move staff to new positions. We do not foresee any redundancies".

Conai was confident that by December everything will be in place for the convergence of the two companies, in terms of staffing, technology, infrastructures and the commercial system.

In February, four directors were appointed for the merged company. Juvencio Maenzena is Executive Director of Operations, Marcia Fenita is Executive Commercial Director, while Arlindo Dava becomes Executive Director of Finance, and Augusto Magobeia is Executive Director of Staff and Corporate Services.

These executive directors are responsible for developing the organisation structure, processes and systems of the merged company.

Conai also announced that 20 companies in which the state holds shares (not including public companies) are facing financial crisis.

She did not name them, but said that efforts are under way to improve their performance. She blamed their financial situation on debts to the banks.

"We are negotiating with the banks to alleviate the debts of these companies", Conai said, adding that investments were necessary in all the companies to make them viable concerns. She put no figure on how much investment is needed.

She claimed that, despite everything, the situation could not be described as bad. "It would be bad if a company closed", Conai said.

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