Zimbabwe: 'No Need to Merge NetOne, Telecel'

26 February 2018

There is no need to merge NetOne and Telecel Zimbabwe as they have turned the corner, and are now performing well.

Government holds 100 percent shareholding in NetOne and 60 percent in Telecel.

The remaining 40 percent in Telecel - which was previously held by a consortium of indigenous groups including war veterans and veteran businesspeople including Dr Jane Mutasa and board chairman Dr James Makamba -- is now understood to have been snapped up by a consortium led by top Harare lawyer Gerald Mlotshwa and businessman George Manyere.

Government snapped up the 60 percent stake in Telecel that was previously held by VimpelCom of Netherlands, through its information communication technology firm, ZARNet for $40 million.

The deal was funded by the National Social Security Authority (NSSA).

Information Communication Technology and Cyber Security Minister Supa Mandiwanzira, told The Herald Business last week that both Telecel and NetOne are now finding their feet, and can only do better if they get more capital.

Minister Mandiwanzira's remarks come at a time when there are growing calls from market watchers that Telecel and NetOne be collapsed into one entity so that they grow their market share, and consequently return to profitability.

Last year, Infrastructure Development Bank of Zimbabwe (IDBZ) resource mobilisation manager Willing Zvirevo called for harmonisation in the ICT sector, particularly involving Government entities.

According to the third quarter postal and telecommunications sector report released by the regulator, Potraz, active mobile subscriptions were almost 13,8 million and of those, Econet had 7,1 million subscribers while NetOne had almost 4,9 million.

Telecel was a distant third with just under 1,8 million subscribers.

More importantly, it is believed that once Telecel and NetOne have been joined, requests for capital injections from the fiscus would lessen, at a time when many parastatals are stampeding for Government financial support but recording losses after that.

However, Minister Mandiwanzira said while merging the two firms would be a "good view", it is difficult to implement since Government does not own Telecel 100 percent.

He said it was not accurate that both NetOne and Telecel were underperforming, saying the former's recent financials suggest that it has turned the corner.

Similarly, NetOne's revenues - which stood at $115 million for the year to December 2016 - have hit a five year high, particularly after the jettisoning of Mr Kangai in 2016.

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