Zimbabwe finally takes control of VimpelCom’s Telecel operator

Zimbabwe finally takes control of VimpelCom’s Telecel operator

The government of Zimbabwe has finally raised the money to buy out VimpelCom’s stake in Telecel, after a long-running dispute and many premature reports in the local press that the deal had been completed.

In April this year VimpelCom said it still owned its 60% share of Telecel, despite a claim from Zimbabwe’s telecoms minister Supa Mandiwanzira that it had bought the stake for $40 million.

Now VimpelCom has formally confirmed that it and its 51.9% owned subsidiary, Global Telecom Holding (GTH), have completed the sale for the same $40 million.

The deal is likely to make way for Zimbabwe’s plans to build a national fibre infrastructure and a shared mobile infrastructure.

Telecel is now owned by ZARNet, the Zimbabwe Academic and Research Network, an internet service provider that is wholly owned by the government of Zimbabwe through the Ministry of Information Communication Technology, Postal and Courier Services.

The completion of the deal means that the Zimbabwe state now owns two of the three mobile operators in the county, Telecel and NetOne, leaving only Econet Wireless, which is owned by the same group as wholesale fibre operator Liquid Telecom, in the private sector.

It also means that the country is more likely to go ahead with its plan – restated only two weeks ago – to insist that all mobile operators share infrastructure. The Postal and Telecommunications Authority of Zimbabwe (Potraz) issued a statement in mid-November saying that it “shall exercise licensing and regulatory powers in respect of infrastructure sharing”, saying that plans could cut capital expenditure by up to 60% and lead to savings passed on to consumers.

The negotiations between VimpelCom with GTH – the former Orascom – and the Zimbabwe government have been protracted. The government said in July 2015 that it had the agreement of VimpelCom to take over Telecel, but the government was unable to provide the agreed $40 million. Employees were told a year ago – and a year early – that ZARnet now owned Telecel and that they were now civil servants.

Before the negotiations the Zimbabwe government threatened to cancel Telecel's licence and even at one stage said the licence had been cancelled. 

In April the minister said he wants TelOne to build the national fibre infrastructure. “When we have elections, they work on the backbone of fibre and we need that infrastructure to be in the hands of a neutral player, which is government because governments change every five years and are there to serve the people,” said Mandiwanzira at the time.

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