Zimbabwe’s TelOne ‘may lose WIOCC shareholding’, says CEO

25 April 2019 | Alan Burkitt-Gray

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Heavily indebted Zimbabwean operator TelOne may lose its shareholding in subsea operator WIOCC, the CEO has told a local paper.

Chipo Mtasa (pictured), head of the state-owned TelOne, told the Harare-based newspaper the Herald that “on WIOCC, definitely our shareholding is at risk”.

The paper said that TelOne owes $10 million and was negotiating with the Reserve Bank of Zimbabwe to get what she called “a workable payment plan” for the debt.

She said: “We actually risk losing the shareholding if we don’t service the debt.” In December Capacity reported that TelOne owes $18 million to a number of organisations, including China’s Exim Bank, which provides soft loans for equipment purchases. But the government also owed TelOne $73 million, Capacity reported. 

Part-ownership of WIOCC – West Indian Ocean Cable Company – means that TelOne has access to competitive pricing for international services via a number of subsea cables, including EASSy, along the east coast of Africa.

WIOCC’s CEO, Chris Wood, told Capacity: “WIOCC does not comment publicly on customer or shareholder matters.”

But Mtasa, who has chaired the WIOCC board but is no longer listed as a board member, was candid in her interview with Tawanda Musarurwa of the Herald.

She said that TelOne is working on a deal that could raise $3 million, which could go towards partially offsetting the $10 million debts to WIOCC. The main problem is that TelOne is short of foreign exchange (forex), which is needed in order to sustain operations – 90% of its infrastructure requirements are imported and 85% of its retail business requires foreign currency.

“The areas where we can generate forex is where we have foreign interconnection traffic. We also generate forex by carrying IP bandwidth across to the other regions,” said Mtasa.

She said TelOne is opening up a fibre link to South Africa via the Beitbridge border crossing, and said that should open up new revenue streams. She said these green shoots “which are beginning to emerge, give us the opportunities to then share and exchange traffic because of the broadening of our capacities with the links that we are opening up.”