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'Telecel on the brink of collapse'

by Staff reporter
17 Jan 2020 at 06:27hrs | Views
WORKERS at mobile network operator Telecel Zimbabwe have raised a red flag over the state of affairs at the company, saying it faces imminent collapse unless government urgently intervenes to rescue the entity.

In a letter written by Communication and Allied Services Workers' Union of Zimbabwe general secretary David Mhambare on behalf of Telecel workers to Information Communication Technology and Cyber Security minister Jenfan Muswere, the agitated employees painted a grim picture.

The workers claimed the company was technically insolvent and reeling in debt."Honourable, we write to you as both the minister of ICT and the representative of the major shareholder who happens to be the government of Zimbabwe. We want to draw your attention to the situation at Telecel, which has deteriorated to unimaginable proportions," Mhambare wrote in the letter dated January 15 and also signed by the union's president, Lazarus Kafesu.

"Without mentioning the issue of salaries and wages which have continued to be very low and uncompetitive in the industry, the workers are more concerned with the viability of the business. The business is now technically insolvent and failing to pay creditors, in fact the liabilities now outstrip assets by far."
The workers said revenue has plummeted to an average of ZW$7 million per month after tariff reviews against competitor NetOne, which is raking in around ZW$90 million monthly.

They also said Telecel's network coverage is retreating at an alarming rate and, currently, only a limited number of subscribers in selected towns and cities can access the network's signal. As a result, the workers said, subscribers are abandoning the service provider en masse.

"The network availability has been cut by more than 65% with a few towns and cities only having network available in the CBD (central business district) or when electricity is available which is during odd night hours," Mhambare revealed in the letter, adding: "Active subscribers have gone down from 2,2 million in 2014 to around 800 000 as at December 2019. Network availability standard has plummeted from 99,99% to just 40% and SIM cards cannot be replaced as the mobile network systems are down."

"The whole of Masvingo province and Beitbridge (just to mention a few) do not have network for subscribers. Subscribers going through to Masvingo last had a signal at the (Boka) Skyline Tollgate. Staff members in some offices are now using competitors' SIM cards in Telecel offices to communicate Telecel business," Mhambare told Muswere in his letter.

He added that the mobile operator's information technology systems are dysfunctional with subscribers failing to recharge airtime due to a combination of system failure and loss of critical staff.

"During the (December) holidays, the system was down to the extent that the official platform (OUTLOOK) was also not operational. This has rendered official communication non-existent," Mhambare wrote.

"The accounting software (SUN) has been down posing a high risk of fraud and theft and outright dysfunction of the whole business. Staff members are failing to use proper tools, thereby posing serious risk to the health of members. Most of the operational vehicles are down and this has affected the proper operations of the entity."

Mhambare pointed out that as a result of the problems at the mobile operator, the livelihood of Telecel workers is under serious threat. "We passionately plead with your esteemed office to save our jobs and the future of our children, families and the economy of Zimbabwe," he wrote. "The reputation of your ministry and the government are also at stake. Honourable may you intervene and save our livelihoods."

Mhambare confirmed yesterday that he had penned the letter to Muswere."Yes, we wrote the letter and we sent it to the minister yesterday (Wednesday) and his office acknowledged receipt of the letter," he said. "We are very concerned for our members who are on the verge of losing their jobs. The company has been reduced to a virtual shell."

The mobile operator has been the subject of a share ownership battle over the years. In October last year, the High Court ruled in favour of once-exiled businessman James Makamba in a long drawn-out Telecel Zimbabwe (Pvt) Ltd share ownership battle with a war veterans' organisation, Magamba eChimurenga Housing Trust.

Government acquired 60% shareholding in Telecel and is in the process of buying the remaining 40%. Finance minister Mthuli Ncube told the Zimbabwe Independent in an interview last year that government is looking to buy the remaining shareholding.

"We paid something towards the shareholding. We have got another US$20 million to pay. We are working on paying off the rest so that we completely take over the shareholding as government," he revealed.

The Finance minister said once it acquires the entire shareholding of Telecel, it will sell the majority of its stake and remain with 26% in the company.
"Once we have concluded that (the purchase of Telecel) we are in a position to shed off some shareholding to other strategic partners to grow the asset to ensure there is value for money," Ncube said.

"There is a reason why we are choosing to remain with 26% because this is what we call effective minority shareholding which we can use to block certain decisions. If it is below that, we are not effective."

Source - the independent

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