Telecel Crisis: Global executives jet in

By Eric Chiriga and John Kachembere
HARARE – Telecel International (TI) executives are in Zimbabwe to discuss the fate of its local unit following government threats to shut down the mobile operator.

This also comes as two of Empowerment Corporation (Private) Limited (EC)’s main shareholders — Jane Mutasa and James Mutasa — have reportedly closed ranks amid signs by the Harare administration that it was fed up with Telecel Zimbabwe (Telecel)’s failure to fulfil various operational issues.

John Swain, TI’s local representative and chief executive, refused to comment on the on-going engagements with government officials, including Information and Communication Technology minister Supa Mandiwanzira and presumably the Postal, and Telecommunications Regulatory Authority of Zimbabwe.
Telecel International (TI) executives are in Zimbabwe to discuss the fate of its local unit following government threats to shut down the mobile operator.
“I don’t have any comment and (any announcement) will come out in the form of a press release,” he told Daily News.

While Telecel’s communications director Obert Mandimika could not be drawn to comment on the likely impact of government’s threats on the mobile operator saying it was an issue being discussed “by shareholders at high level meetings”, it is understood that the threats have “hit home” and thus prompting Makamba, and Mutasa into their own indaba in South Africa to map a way forward.

As it is, analysts say it is sink or swim for all shareholders, hence the heightened activity — from all angles — to try and save the situation.

And in a statement yesterday, Telecel said it took government’s threats “very seriously”.

“Our shareholders are engaging with relevant stakeholders and are working closely, and tirelessly with all key authorities to find a lasting solution to the issue,” it said. The company — claiming that it is a fully paid-up abiding tax contributor and has invested around $237 million into the country — said it “remains fully committed to… complying with all legal and regulatory requirements within the agreed time frame” and “takes very seriously its legal, financial, operational and social responsibilities”.

With EC holding a 40 percent stake in Telecel, the country’s third largest mobile network operator serves about two million subscribers and employs nearly 1 000 permanent, and contract workers.

On Wednesday, Mandiwanzira said government was going to shut down the telecommunications company for breaching the country’s empowerment law and operating without a licence.

“Our position that Telecel should cease operations because they have been operating without a licence is the position that has already been adopted by Cabinet. There is a Cabinet committee in place to execute the decision of Cabinet,” he said.

“That committee is being chaired by (Christopher) Mushowe. Our position that Telecel has been operating without a licence and failed to honour local empowerment laws is the same position that has been adopted by Cabinet,” Mandiwanzira added.

Apart from Telecel being unlicensed and failing to comply with empowerment laws, observers say EC managing director Patrick Zhuwao has recently hinted that perennial infighting at the empowerment outfit have not helped matters.

As such, it would seem that the bilateral meeting Makamba and Mutasa was a follow-up to the South African-based businessman’s recent calls, and indication that relations had thawed and, therefore, shareholders were pulling together now to make the business work.

Lately, the parties had been warring over plans to sell EC’s 80 million Telecel shares to Brainworks Capital Management for $20 million.

“The reported actions of the government … have had a sobering and introspective effect on all parties involved in EC. It is in the light thereof that EC… has taken the initiative of resolving, finally, all matters afflicting the shareholding of the company,” Makamba said recently.

Meanwhile, TI is reportedly being courted for its 60 percent stake by investors, including Angolan billionaire Isabel Dos Santos.

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