TelOne needs $250 million for recapitalization as vandalism of infrastructure worsens
…management bemoans tariff freeze
Telecommunications company, TelOne says it requires $250 million for recapitalization over the next five years, as the state entity targets more investments into LTE.
TelOne managing director, Chipo Mutasa says :“If we are given a wish list, it would be $250 million upwards. What we have said is that we need US$50 million, minimum, every year for the next five years.”
Reeling from massive vandalism of its copper network ,where the company has lost $1,5 million in potential revenue, Mutasa said recapitalization will entail investing in LTE network, which is less prone to vandalism.
“We spoke about lack of capitalization, that is why we do not have LTE. All our LTE plans are out but we lack funding. That is why we are crying out loud for funding. We are in the prices of mobilizing funding,” Mutasa says.
TelOne is one of 43 state-owned and parastatal companies that government has targeted for full or partial privatization.
Mutasa however could not be drawn of into the progress of the partial privatization deal, which is expected to turnaround the company’s fortunes.
TelOne admitted it had been affected by the tariff, freeze.
The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) is yet to approve a tariff review, with TelOne charging $0.025 per minute for voice and broadband, while $0.00050 is charged for one megabyte of data.
“The last tariff review was in September 2021. When measured against the movements in exchange rates, for voice products the effective price was $0.07cents per minute after the tariff increase and it deteriorated by 19.3% to $0.058 cents per minute by 31 December 2021. As at the date of publishing of this report, no tariff adjustments had been approved for 2022,” Head of corporate communications, Melody Harry says.
Failure to review tariffs comes on the back of ballooning costs.
As at end of May 2022, TelOne’s total costs had grown 107% to $1.8 Zimdollars per month up from $ZW856 million per month.
Despite the headwinds, TelOne posted significant growth in 2021 registering an inflation adjusted profit before tax and depreciation of $3.2 billion Zimdollars up from $1 billion Zimdollars achieved in prior year.