Put your house in order, Telecel told

Golden Sibanda

GOVERNMENT says Telecel Zimbabwe should first address its lopsided shareholding by transferring a majority stake to locals, before its mobile phone operator’s licence can be renewed. Transport,

Communications and Infrastructural Development Minister Nicholas Goche yesterday said Telecel’s mobile phone licence would not be renewed until it had addressed its shareholding anomaly.

Minister Goche made the ultimatum in an interview with Herald Business after announcing an increase in mobile licence renewal fees from US$100 million to US$137 million for a period of 20 years.

Egyptian firm Telecel International holds 60 percent of Telecel Zimbabwe, in breach of terms under which the licence was issued by the Postal and Telecommunications Corporation in 1998.

“They (Telecel International) must meet the conditions they were asked to meet. They must go back to the original position of 60 percent (local) and 40 percent (foreign) with the Empowerment Corporation. Once they meet that position, there will be no problem.

“The pressure is on them (to address the shareholding anomaly). If they don’t do that, I will not renew their licence. The ball is in their court (as their licence is about to expire),” said Minister Goche.
The country’s second biggest mobile telecoms operator’s licence is due for renewal because its 15-year life span is about to lapse.

Telecel International should have regularised its shareholding in Telecel Zimbabwe by selling 20 percent to indigenous shareholders, five years after it was issued with a licence.

But failure to address the anomaly within the agreed timeframe saw Telecel’s mobile licence being cancelled by Potraz in August 2007. The licence was cancelled in terms of Section 43 of the Postal and Telecommunications Act (Chapter 12:05).

The company now stands in breach of both the licence conditions and the provisions of Section 36 of the Act. But the mobile firm continued operating after appealing to Minister Goche.

Not only is Telecel Zimbabwe’s majority shareholder, Telecel International, in breach of telecommunications regulations that require locals to hold a controlling stake in telecoms firms, but of the Indigenisation and Economic Empowerment Act. The Act requires that previously marginalised black Zimbabweans should hold at least 51 percent in any locally registered firm.

Telecel Zimbabwe’s acting general manager, Mrs Angeline Vera, declined to discuss the issue following Minister Goche’s declaration.

Over the years, Telecel International has made commitments to address its lopsided shareholding in Telecel Zimbabwe, but has not done so. Government sought to empower locals when it issued the Telecel mobile licence. It allowed partnership with a foreign technical partner as the mobile phone business was then a new phenomenon.

While the Egyptian company has taken long to address the shareholding anomaly Telecel Zimbabwe has been rocked by a series of controversial allegations around the way it is managed, which allegedly only benefits foreigners at the expense of locals.

With over 2,5 million subscribers, Telecel is Zimbabwe’s second largest operator after Econet Wireless.

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