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#MondayBlues: Three Options For Telecel Zimbabwe !


There is an urgent need to come up with the best way forward for what used to be the fastest-growing mobile Network in Zimbabwe, which today is not even worth mentioning as a player, but a loss-making entity living in its last days.

Rude as it may sound, this is a fair reality !

By Toneo Toneo

Experts in the ICT sector have urged stakeholders to urgently consider consolidating the shareholding structure or selling Telecel assets so that they salvage some form of value before its too late, as the company performance continues to skydive.

While the current shareholder, Government via Telecel International Controls 60% and Economic Empowerment with 40% have all but failed to raise capital, its time to move on to plan B before the asset crumbles. “

“There is a genuine need to re-structure the share capital of Telecel Zimbabwe to realign the ownership of the company and in the process providing it with access to cheaper investment capital for its network expansion and modernization program.” an ICT expert added his voice to the matter.

The government’s Transitional Stabilisation Program (TSP) that was recently launched by the calls for the accelerated privatization of State-Owned Enterprises including Telecel, NetOne, and TelOne in the ICT sector which will result in Government realizing some value during the sale and Telecel, in particular, will possibly gain access to the much-needed investment capital and the necessary skills to operate viably, and provide critically-needed, quality and reliable services to the Zimbabwean economy, thereby contributing to the economy recovery of the country.

The major reason to drive this agenda is to broaden the shareholder base to ease access to capital and establish sound corporate governance for the entity that once used to be the most promising player which is now sinking into oblivion.

Three major options have been tabled so far which need both stakeholders to lose their pride and act in the best interest of the asset, if at all they need to salvage value, preserve employment its offering and more importantly keep the few Zimbabweans connected on the network.

The first option is the worst-case scenario, Sell Telecel Zimbabwe now to NetOne, so that all the subscribers and infrastructure is consumed by one state-owned mobile network and payoff the Economic Empowerment shareholders their  40% according to actual valuation and debts they have.

The Supa Mandiwanzira trump card that killed Telecel may be repeated again here, where you consider the unpaid license fee as capital expenditure and great evaluation which the government  assumes against the minority shareholder to then determine the actual value of shareholders, sinking the minority.

Not very healthy, but an interesting one to Telecel  Zimbabwe as a company, NetOne will come out stronger with a subscriber base and more infrastructure to spread around.

Telecel Zimbabwe was valued at around US$80 million as of 2018 when the company was still doing well and had some significant growth and a customer base. This has greatly changed, I could probably guess that its worth less than  $50 million now excluding the debts.

The first option for Telecel Zimbabwe is to have new Corporate Shareholders that would normally have a commitment from an investment bank to finance their acquisitions in Telecommunications.

The New Corporate Shareholders can either be a reputable regional or global technical or financial partner with experience in the Telecoms and Finance sectors. They would ideally have solid relationships with global investment banking institutions to facilitate the funding of network expansion, new technology, restructuring, and any future targeted acquisitions. This facility will be made available for this offer. The New Corporate Shareholders will bring in the funding for the whole block of shares under offer from Empowerment Corporation.

The second option is targeting shares currently held by Empowerment Corporation for further partial redistribution to the Employee Share Ownership Scheme (“ESOS”) and Telecel International.

the second one is that for localization or indigenization appears to favor a more broad-based approach including vendor financing, as evidenced by the previous plans approved for Zimplats, Unki and Mimosa, all of which were within the mining sector.

The Community Trust is more applicable to mining companies, whereas non-mining companies are expected to include an Employee and Management Trust, a good example of this being the indigenization of Schweppes Zimbabwe and BAT.


The story around Telecel Zimbabwe  is very  long, We have done an  overdrive over this company and these articles and many  more citing its challenges and way forward, but this is no longer time for that anymore,

The message is Telecel Zimbabwe is crumbling and something needs to be done before the asset is completely dead!

If at all we are going to have Telecel in the near future, we need the government to swiftly move in quickly and ask another shareholder under Empowerment  Cooperation (EC) to do the honorable thing and submit control to a more competent stakeholder.

Holding on to Telecel Zimbabwe by the current shareholders will do it no good to the asset because the next thing, Telecel Zimbabwe will become the biggest liability any investor has ever had in our technology sector, and yes it’s a ticking time bomb.

They are struggling to pay competent salaries, they are failing to pay their government obligations on the license fee, they are now a perennial loss-making entity and worse, management has failed to come worth a turn around the strategy that works, forcing them to be lame ducks as the situation deteriorates.

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