TelOne to repay US$29m debt
THE country’s sole fixed phone line operator TelOne has reached a debt repayment deal with Econet Wireless Zimbabwe and Telecel Zimbabwe to repay US$29 million it owes to the two telecommunication firms for interconnection fees.
Interconnection is the physical link of a carrier’s network with equipment or facilities not belonging to that network.
TelOne’s obligations to Econet and Telecel stand at US$24 million and US$5 million respectively.
The company’s MD Mrs Chipo Mtasa said Government had been engaged to thrash out the payment plan.
“There is a tripartite offset arrangement between Government, ourselves and Econet and there is some money being applied towards that debt. However, we still want to look for other areas; how we can raise cash to pay, not just Econet but also Telecel,” said Mrs Mtasa.
TelOne’s financials for the six months ended June 30, 2015 - the first to be published by an unlisted entity - indicate that the enterprise recorded a US$480 000 profit from a loss position of US$7,8 million in the prior year. Mrs Mtasa said of the statement: “It shows that we owe them (Econet and Telecel) but they are not the only creditors we have. As you may know, we owe quite a number of other entities just like we are also owed by various entities.
“The results were compiled using the international accounting standards; you know that TelOne, while it is a 100 percent Government company, it has to comply with the internationally acceptable standards.
“So we do apply international accounting standards in all our accounting because we operate as a private company. TelOne is a private limited company and therefore subject to the requirements of the Companies Act; the requirements of the international accounting standards.”
The parastatal is itself owed more than US$190 million by individuals and companies, with Government owing more than US$40 million in unpaid bills.
Much of the company’s recent performance has been underpinned by new ser- vices, particularly in data.
Some of the innovative products include Metro Wifi Service and Fibre to the Home (FTTH) services.
Metro Wifi is offering services at Mupedzanhamo market, TelOne Centre for Learning, Julius Nyerere Way, Runhare House, Cleveland House, Road-port, Montague Heights, Harare Exhibition Park, Joina City and Sam Levy’s Village - all in Harare.
Figures from the Postal and Telecommunications Regulatory Authority of Zimbabwe indicate that while the mobile penetration rate in Zimbabwe hit 90,3 percent in the fourth quarter of 2014, broadband penetration remains low at just over 40 percent, creating scope for further growth.
TelOne is also engaging cross-connect partners in Mozambique and Botswana to further reduce Internet costs.
According to Mrs Mtasa, it was critical for parastatals to periodically release financials so that potential investors could get an appreciation of their performance.
TelOne is weighed down by a US$345 million legacy debt dating back to the Postal and Telecommunications Corporation era.
It owes National Railways of Zimbabwe US$144 million, Hwange Colliery Company Limited US$161 million and Air Zimbabwe US$300 million.
Explained Mrs Mtasa: “With the confidence we want from investors, I think there is going to be more and more need for para- statals, especially those which are of a commercial nature, to publish (financial results).
“It is good accountability, it’s good corporate governance. I think also the code of corporate governance that has been released, actually spelt out the (need for) publishing of financial results.
“It’s something that I think investors really look at and they want to value. Zimbabwe is on a mission to attract investment and we also have this ZimAsset agenda as well as the 10-point Economic Plan which His Excellency, the President, unveiled. All this dovetails with the publication of results.”
Secretary for Finance and Economic Development Mr Willard Manungo last week told The Sunday Mail Business that Government was evaluating turnaraound plans for 10 parastatals.
These are the Cold Storage Company, Agricultural and Rural Development Authority, TelOne, Grain Marketing Board, Air Zimbabwe, Industrial Development Corporation, Zimbabwe
National Water Authority, National Railways of Zimbabwe, Civil Aviation Authority of Zimbabwe and Zimbabwe Power Company/ Zimbabwe Electricity Transmission and Distribution Company.
“We have targeted 10 parastatals to appreciate what is going on there and then come up with turnaround programmes. TelOne has posted some profit and it becomes clear that the company can be turned around. The process has already started,” said Mr Manungo.