Will TelOne succeed raising $100 million this time? What has changed?

L.S.M Kabweza Avatar

Reports in the media in recent days say the government owned fixed line operator, TelOne, is looking to raise $100 million from international investors.  Chipo Mutasa is quoted by Finx:

We are busy re-looking at our capital projects in a view to doing another fundraising exercise to the tune of $100mln. Our capital projects will span from this year 2014 right up to 2018 along with our business plan for the strategic transformation of TelOne.

This is not the first time the company has tried to raise funds internationally. In 2011, acting MD, Hampton Mhlanga announced that TelOne was looking for $100 million to operationalise it’s GSM license, a license they had just been issued with but were yet to start offering services. That $100m didn’t happen ofcourse, else we would have a fourth GSM operator giving Econet, Telecel and NetOne some competition. Yes, for some weird reason (less weird when you follow the money though) the government thought it wise to have two GSM operators competing against each other.

But even back then, we didn’t buy the whole operationalising mobile case. We wrote:

As far as we can see, the answers point to one suggestion: TelOne is not interested in mobile telephony at all in the long run. The cash, more likely. TelOne is looking for a hundred million dollars, full stop.

Fast forward 3 years, and that 100 figure is back is what we’re talking about again. And tellingly, this time it’s not for operationalising a mobile license. It’s for capital projects, top of which the the FinX article suggests is to “replacing our core network as our infrastructure is outdated”, and “to extend our backbone fibre footprint across country”.

In fact that game changing GSM mobile license is not talked about anymore, and is now just a ‘consideration’.

What are the chances that investors will back TelOne this time? We have not idea ofcourse. The business may have better prospects not clear to us looking from outside. The things we can see though, and especially latest revelations by the MD last week, paint a bleak picture:

By the end of the year last year, TelOne had only collected $20 million of their targeted $50 million in debts, and had to write off debts of residential customers amounting $80 million. Now Mutasa even says that even though revenue is up 8% year on year, monthly collections have reduced to an average $8m from collections in excess of $13m last year. The liquidity crunch that all businesses in Zimbabwe are struggling under, is affecting TelOne too.

TelOne services are post-paid, and post paid in a highly illiquid market means most subscribers will be unable to settle their current bills, which just exacerbates the situation the company is struggling to rectify.



  1. Farai Sairai

    TelOne needs a management revamp and a new strategic plan. Fixed line model still works if implemented properly. Many services which are cheap can be consumed by consumers/business and TelOne needs to gets its head out the pit sand and start thinking like a private company to compete against the Econet, PowerTel, etc. I think it is a huge money making business which needs more than $100m but I doubt it will get any investors. If there are any, they may want some shares instead of getting the loan paid back. And I doubt the Gvt will allow that to happen.

  2. fungai

    Am laughing my head off please someone update are these guys still relevant. Do they have any service to offer anyone in this day. These guy’s services belong in the Jurassic era period.Let’s move on

    1. L.S.M. Kabweza

      Just curious, why do you think they are irrelevant?

      1. Zivanai

        Maybe the use of obsolete technology. Really wish them well in attracting investors

    2. Honesty

      Tel One offers the most reliable broadband internet and the landline is a lifeline for businesses like mine

  3. tel1=no support

    try phoning adsl support dept when you have a problem and/or link is down. what a joke.

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