The Government and parastatals owe TelOne RTGS$101 million in outstanding payments. Speaking before the Parliamentary Portfolio Committee on Information Communication Technology,Postal and Courier Services on Monday, TelOne Managing Director Mrs Chipo Mtasa, revealed that the debt owed is a major outstanding issue that is adversely crippling the company’s cash flow.
The money the company is owed is equivalent to approximately US$30 million based on Zimbabwe’s official prevailing exchange rate.
“The issue that will really help us is government paying its debts to TelOne. It is an issue that continuously plays havoc with our cash flows… right now the total that we are being owed by government and parastatals is RTGS$101 million,” said Mtasa
In their submission to the Portfolio Committee, TelOne noted that there is urgent need for government settlements via the set off arrangements to be finalized to allow the company to settle local creditors who are now charging the company penalties.
“Imagine if we got all that money in, that actually is a good RTGS fund from which we can actually fund some off our immediate CAPEX needs,” Mtasa said.
Interestingly, ZIMRA is charging TelOne interests and penalties despite the fact that the government is owing TelOne more for voice and broadband services rendered.
TelOne has over the years been threatened with service disruption in the form of disconnections and not being able to be supplied with equipment from critical foreign suppliers, who include Wiocc, TDM Mozambique, TCF and China-Exim Bank. Disruptions of internet service will have a devastating impact on business and the economy at large on the basis that any disruption will affect the country’s communication systems, national security, the reputation of the company and the effect on the economy at large cannot be overemphasized.
On other issues affecting TelOne, the company continues to be haunted by Legacy Loans amounting to US$383 million it inherited from the Postal and Telecommunications era.These loans have rendered the company technically insolvent in US$ and RTGS $ terms so there is need for government to conclude the takeover of these loans so as to recapitalize the company and attract investment.
The other issue is the Telecoms sector has been omitted by the Ministry of Finance and Economic Development in identifying critical areas for foreign currency allocation hence, TelOne has faced increased difficulty in securing foreign currency on which 90% of the company’s inputs to provide service are imported.The company is in urgent need of foreign currency of US$25 million to settle pressing foreign creditors and US$2.4 million to support allocations.