Telecel Zimbabwe revenue hit by lockdown

STATE-run telecoms firm, Telecel Zimbabwe has drifted into a crisis.

Revenues have plummeted for four straight months since November, while it has been affected by frequent downtimes at its base stations countrywide, according to sources who attended a recent works council meeting.

Telecel workers pressed for a pay hike during the meeting, but executives said the firm had been hit by lockdowns, which have been in force since March 2020.

But workers queried why Telecel had failed to capitalise on fresh opportunities that came with lockdowns, which increased demand for data services.

According to the Postal and Telecommunications regulatory Authority, mobile internet and data traffic grew by 43% to record 14 878TB in the third quarter of 2020 from 10 407TB during the second quarter.

The crisis was confirmed in Telecel's letter to the national Council of the Communication and Allied Sectors on January 4, where management requested exemption from first quarter pay adjustments.

"The company, based on the past lockdown that was announced in March 2020, suffered a strain on its revenues and an increase in the cost of doing business...from this past experience we are likely to see a recurrence of diminished revenue and increase in other costs, hence our request to suspend the negotiations for the month of January. We further request that any review or adjustment be looked at after the lockdown for sustainability of operations and jobs," Telecel said.

This week, chief executive officer Angeline Vere confirmed the crisis but said she was on top of the situation.

"Like any other organisation, the lockdown effects have resulted in a number of operational issues which are now being addressed," Vere told businessdigest.

"We have also been seriously impacted by limited access to forex to pay for foreign currency denominated service level agreements and to embark on planned network expansions. However the situation is improving with the new auction system," she noted.

But Communications and Allied Workers union of Zimbabwe secretary general David Mhambare said it was difficult to buy into Telecel management's explanations.

"It is common knowledge that during lockdowns, telecoms companies have seen an upward trend in revenues especially in data, but Telecel is relying on voice and yet data is now the revenue driver," Mhambare said.

"Telecel topline has been shrinking in real terms. In Masvingo and Manicaland there are four engineers and one vehicle, an engineer from Harare attends some of the faults. Workers in Gweru are walking to the Gweru base station controller to ensure there is connectivity because once the base fails, it affects the network in Gweru, Gokwe, Masvingo and some parts of Bulawayo."

He said Telecel workers were concerned that the firm's subscriber base had declined significantly since 2015.