#MondayBlues: Dear Kazembe, Telecel Zimbabwe Is Dying!

Dear Hon Minister Kazembe, this is our second open letter to you. We do appreciate that you are fairly new in the industry, and you still need time to fully familiarize with the sector, however as the fourth estate, we will put you at speed and point out at areas needing urgent attention in the sector .

Telecel Zimbabwe was the country second biggest mobile network by subscriber base, with an all time high of 2.4 million subscribers, around 2011, which was a market share of 30%.  It emerged as a real powerhouse, causing serious headaches to the giant,  Econet Wireless Zimbabwe, as it continued to be named the country’s fastest growing mobile Network.

I remember very well around 2012-2014, Telecel Zimbabwe was at its best peak when it re branded from an old tired blue logo to a vibrant red and white. It was under the Egypt based Orascom Flagship, Which owned Telecel International, a subsidiary of the Telecel  Central African Republic (CAR) which then later sold to Econet Wireless Global 

Old Telecel Zimbabwe logo
New Telecel Zimbabwe Logo

 

 

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In June 2012, Francis Mawindi joined the organisation as the CEO who increased the company’s market share to 30% from 21% at the beginning of the year. EBIDTA for the group increased to 30% by 2012. Mr Mpore  had been the CEO for the past two years running from 2010- 2012,  before he had immigration issues to renew his contract, he was since been replaced by Mr Swain who  took over for less than 6 months from 2012 January before Mawindi took charge in July the same year. Mawindi however left on April 1 2013, after clashing with the Makamba board in Egypt. Angeline Vere took over reigns and she is the CEO to date.

What was very significant about this period was not the number of the CEOs that was at helm of the company, but rather the only major  investment Telecel Zimbabwe ever had. Orascom funded Telecel Zimbabwe to the tune of $40 million  through vendor funding.

This move saw the entry of Huawei and ZTE coming in to supply infrastructure for network development, which basically was good enough for 3 G data services, playing catch up to Econet which introduced the same service in 2009.

Ironically , this was the best time ever for the company. Telecel Zimbabwe  management will have to be commended for doing the best with the little they had. They grew the network to shoot up to 2, 4 million  subscribers, and were growing in leaps and bouds, recorded as the fastest growing network in the country.

In 2012, Telecel Zimbabwe  population coverage increased to 85% from 70% as they increased  coverage and capacity into the network while their revenue shot to 2013.

The technology Capex investment for Telecel Zimbabwe  after that only came in 2014 – USD6M, 2015 – USD2M, 2016 – USD1.5M and in 2017 – USD4.4M, which is only $13.9 million in total.

After  2011, Telecel Zimbabwe to date has not received any  significant capital investment , but rather hogged the limelight for all the bad reasons, the board had more energy towards drama and  internal differences more than growing the company.

They literally dumped the mobile network to grow from selling airtime juice cards with no investment, yet giants like Econet were receiving serious funding over a billion and closest competition like NetOne received its China’s eximbank loan of $218 million, plus another fresh $71million 

For Telecel to be still operating to date, standing competition against well invested mobile networks, its nothing short of a miracle, and the management deserves all the credit for holding on amidst bleeding serious human capital.

Around 2012, Vimplecom bought the Telecel International Stake  from Orascom to own the 60%. There was not any significant investment except cases of networking pruning recorded befoere they decide to give up the whole stake

Come 2013, problems mounted for Telecel Zimbabwe with the disconnection of the interconnection link between Telecel and Econet   in July 2013, by Econet on allegation that Telecel was not a licensed operator.

The biggest challenge for Telecel Zimbabwe came in December 12, 2014,  when Supa Mandiwanzira was appointed the new ICT minister,  two months later he carelessly roared and threatened to shutdown Telecel Zimbabwe over licence issues. 

The case was only rescued by the courts , giving the mobile network a 30 day reprieve to put its house in order as it was said to be operating outside the law.

It got messy, subscribers lost confidence in the mobile network, they lost their high value subscribers, government announced that they should leave towards closure and so did the other millions.   Today Telecel Zimbabwe has to date only 1,2 milion active subscribers.

In 2012  Telecel’s market share was at around 25% and therefore with adequate capitalization this historical market share can be easily regained. The team in charge has capacity to stir back the ship if they urgently get the right funding.

The new Telecel board recently spoke on plans to invest  $500m and recapitalize the asset, and government must play a critical role, the same way they have funded NetOne with millions of dollars , so does Telecel Zimbabwe need it to undersign the same deals.

This mobile network has outlived its miracle expediency and needs critical support to both the board and executive to fund the asset.

The infighting and energy to fight more will need a tactical approach to end this in the interest of the company. If the shareholders have have so much negative outside the asset, they need to be bought out and trying boxing as a professional sport.

Telecel Zimbabwe has a great potential, unfortunately it has been mismanaged  by stakeholders and Zimbabweans are looking forward to your intervention to get this asset running again.

 

 

 

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