Telcos Owe Banks $2.7bn, Plead with Gvt For Help

Zimbabwe Telecommunications operators combined, are battling to settle a $2.7 billion debt they owe to banks which financed their broadband infrastructure projects in Zimbabwe.  

Impeccable sources who spoke to TechnoMag hinted that the companies borrowed millions separately to drive broadband growth in Zimbabwe but the banks they owe were now on their necks demanding payments for the monies owed.

By TechnoMag Reporter

TelOne and Econet Wireless  are the most affected as debtors are giving them pressure to settle accounts while back home, the pricing structures of data has become a bone of contention squeezing their revenues and making the environment unsustainable.

TelOne and Econet are said to have been in deep trouble calling out for assistance from government and investors respectively for help to make good their financial position as the current pricing models have proven to be less profitable and unviable for their business.

Government got concerned over the levels of unprofitably in the sector and the growing nagging by Telcos to have government chip in to bailout the troubled firms.

“This is the same reason which `forced the Telecommunication Association of Zimbabwe TOAZ to table a meeting with government to review their tarrifs as the current pricing is killing their business and business model.

“The Zimbabwe Telecommunications operators engaged  government to review the pricing model as the only way they will be able to settle their borrowed loans otherwise they are sinking in it daily due to the operational environment,” said the sources.

Meanwhile, due to swelling competition in the sector, almost all mobile network operators were offering data bundles which are beyond their profitable margins, they have engaged themselves in a senseless battle where they are all making loses said a government source.

The sources instead hinted that the operators became so obsessed with competition to a point that they were all just running promos to please loyal subscribers yet these promos are not making any financial sense to their companies.

“Its a senseless game, they got to a stage of no return, they kept competing till they charged unprofitable data rates, now they come to government to seek guidance and enforce floor pricing so that they become profitable again.

“Only government can stop this nonsense and that’s why they were involved to and interested in putting up floor prices,” said the source.

 

Marvelous Chibagidhi

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