Business / Companies
Telone debt management strategy, customers fail to access Econet
24 Apr 2011 at 11:28hrs | Views
TELONE, state controlled telecommunications company, is presently owing US$48 million in termination fees to Econet Wireless Zimbabwe (EWZ) and has resorted to "reducing pipe-carrying traffic into the Econet network" in order to limit further accruals.
The debt management strategy which has been agreed upon by the two companies has resulted in customers failing to seamlessly connect to the Econet network.
It was envisioned that the reduction of the pipe-carrying traffic would reverse the current situation and result in more Econet subscribers calling TelOne subscribers, a development that could have made the mobile telecommunications firm a net payer.
Although the new method has been agreed by the two parties ' TelOne and EWZ ' customers have expressed reservations over the system, which has ultimately scuppered the ease of communication.
Information indicates that the debt obligation has been rising markedly since February 2009 and between February 2009 and February 2011 the debt soared by US$45 million.
EWZ, through its financial advisors TN Financial Services, recently wrote a letter to the Minister of Finance, Mr Tendai Biti, and copied it to the Minister of Transport and Infrastructure Development, Mr Nicholas Goche, and the Minister of Information Communication Technology, Mr Nelson Chamisa, proposing ways through which the debt could be retired.
The mobile telecommunications firm, which has more than five million subscribers on its network, feels that the rate at which the arrears have been building up requires the intervention of Government.
Among some of the overtures that have been made include offsetting the debt using the incremental tax obligations that will naturally accrue from the capital investments and expansion of the network that is currently under way.
Econet is willing to invest US$10 million "on agreed terms" into building the State-owned company's capacity to meet its interconnection obligations.
It is expected that the investment will help in providing a pre-paid platform to enable TelOne to manage its debtors. Under the various remedial measures that are being proposed, TelOne will be able to retire its debt in four years' time.
The illiquid local financial markets and hostile international financial markets have affected many State-owned enterprises resulting in the deterioration of service provision.
Telecommunications experts contend that the service provided by TelOne lags behind its peers in the region in terms of technological innovation and service delivery.
The debt management strategy which has been agreed upon by the two companies has resulted in customers failing to seamlessly connect to the Econet network.
It was envisioned that the reduction of the pipe-carrying traffic would reverse the current situation and result in more Econet subscribers calling TelOne subscribers, a development that could have made the mobile telecommunications firm a net payer.
Although the new method has been agreed by the two parties ' TelOne and EWZ ' customers have expressed reservations over the system, which has ultimately scuppered the ease of communication.
Information indicates that the debt obligation has been rising markedly since February 2009 and between February 2009 and February 2011 the debt soared by US$45 million.
EWZ, through its financial advisors TN Financial Services, recently wrote a letter to the Minister of Finance, Mr Tendai Biti, and copied it to the Minister of Transport and Infrastructure Development, Mr Nicholas Goche, and the Minister of Information Communication Technology, Mr Nelson Chamisa, proposing ways through which the debt could be retired.
Among some of the overtures that have been made include offsetting the debt using the incremental tax obligations that will naturally accrue from the capital investments and expansion of the network that is currently under way.
Econet is willing to invest US$10 million "on agreed terms" into building the State-owned company's capacity to meet its interconnection obligations.
It is expected that the investment will help in providing a pre-paid platform to enable TelOne to manage its debtors. Under the various remedial measures that are being proposed, TelOne will be able to retire its debt in four years' time.
The illiquid local financial markets and hostile international financial markets have affected many State-owned enterprises resulting in the deterioration of service provision.
Telecommunications experts contend that the service provided by TelOne lags behind its peers in the region in terms of technological innovation and service delivery.
Source - Byo24News
