Zimbabwe and regional technology news and updates


Breaking News: Econet buys Telecel


econet-wireless-largeVimpelCom, the parent company of Telecel Globe, has just announced via a press release that it has sold all its shareholding in Telecel Globe to Econet Wireless Global for US $65 million. Effectively, the release says, Econet Wireless now owns U-Com (or Leo, what Telecel is called in Burundi) and Telecel Central African Republic.  So yes, the deal does not include Telecel Zimbabwe.

The release says Vimpelcom had previously agreed to sell Telecel Globe to another company, Niel Telecom, last year but the deal fell through as the purchaser was unable to pay the balance. They had just paid a deposit and apparently struggled to raise the rest of the money.

In as far as Telecel Zimbabwe is concerned, the state of ownership remains Vimpelcom 60% and the local guys, the Empowerment Corporation, 40% the press release paints. It’s not clear though if this is directly a Vimpelcom ownership or via their 51.9% ownership in Global Telecom Holding S.A.E. (formally Orascom)

In term of what exactly Econet’s $65 million buys: Leo in Burundi has 1.57 million subscribers and Telecel CAR has 400,000 subscribers. Even though Burundi has 1.57 million subscribers, the Average Revenue per User of those subscribers as of the second quarter this year was $3, while that of CAR was higher at $6.

Econet have likely bought the two operations at a discount as the previous buyer was supposed to pay $102 million.  Effectively, Econet the voice and mobile broadband telecoms company is now in 1 more African country (CAR). The company is already in Zimbabwe, Botswana, South Africa, Nigeria, Lesotho and Burundi.

To speculate on why Zimbabwe is not part of the deal, we think its mostly to do with the fact that Telecel Globe doesn’t own the whole company and has a complicated relationship revolving around indigenisation. Econet Zimbabwe could ofcourse buy it since they fulfill the indigenisation requirement but who knows if the 40% shareholders are looking to sell, and if they don’t sell, does Econet want to have them as fellow shareholders. There’s the anti-monopoly angle to think about. Them buying Telecel Zimbabwe would have Econet owning more than 85% subscriber market share.

Quick NetOne, Econet, And Telecel Airtime Recharge

45 thoughts on “Breaking News: Econet buys Telecel

  1. So Econet didn’t buy Telecel!! Why have that heading then??? SMH. We will read your articles anyway, no need for the misleading titles.

    1. Did the headline say Econet buys Telecel Zimbabwe or it says Econet buys Telecel.

      please dont just comment negatively before reading. its all clear as day and night

    2. to be fair econet is buying telecel burundi and telecel car which is very accurate. ko ndokuti news kaa vakomana kuti zvityise

  2. Game changing Econet! These guys are quite aggressive! Good or bad?? I dont know, but I suspect…..ummmm….BAD!

    1. i think its bad. we need competition in Zim, the more the competition, the more us the subscribers benefit. if Econet buys Telecel Zim Competition is over.

  3. You guys your headings should be in the right place, how misleading. I almost had a heart attack!!!
    Apa I had already spread the news on my whatsapp groups….

  4. Troy don’t justify that headline, it’s falsely alarming. Buying Telecel means buying at least a majority share in the whole of Telecel. Unnecessarily misleading. We would read still if the headline was more precise.

      1. Mr Kabweza, Techzim being a respectable blog should also pick headlines responsibly. Imagine The Herald newspaper tomorrow with the headline “Breaking News: Econet buys Telecel”. People would rush to buy others would rush to conclude without even reading. The intent of the headline is typical of bottom feeder websites…

        But knowing Techzim, we know this is not a common occurrence so we will let it go for now…

  5. from my research,Vimpel owns Telecel Zim,but Telecel Gobe Limited which owned U-COM in Burundi and Telecel CAR in Central African Republic is the one that Econet bought,so still Telecel Zim is owned directly by Vimpel not through Vimpel’s previously owned company called Telecel Globe.

    1. It’s not clear which company exactly owns Telecel Zimbabwe directly right now. Yes, certainly it is Vimpelcom but they could own it in two possible ways: Directly or via Global Telecom Holdings (which used to be called Orascom). Vimpelcom hasn’t sold its 51.9% shareholding in Global Telecom Holdings.

      GTH has other shareholders because Vimpelcom doesn’t own it 100%. They are majority though so yes, effectively they own. Just thought the detail would help. If you know more, please share.

      1. but from Vimpel’s website it seems like Telecel Zim is part of Vimpel’s Africa & Asia Business Unit.

  6. nhai kwabeza what would a reasonable man think if he sees yo headline?i think u phrased the headline on purpose to capture as much attention.

    1. I agree with you Nashe we would expect these link bait strategies from mediocre websites not Techzim!

  7. don’t see what the fuss is about. econet did buy telecel didn’t it? the fact that you made assumptions without verifying first is not techzim’s problem. reminds me of the screaming headline that once appeared in herald/chronicle – “MOYO RESIGNS” many people rushed to buy the paper thinking it was jonathan moyo only to find out that it was nkosana moyo who had resigned. a moyo had resigned – a telecel has benn bought by econet. fact!

  8. must admit, it still managed to make u read the article, and those of us who love to know, thank you techzim

  9. I think Techzim yarasika, you are now a news Blog. We expect Technology articles not Econet or Telecel news.

  10. Is $3 Average Revenue Per User(ARPU) good? Even $6. What is the ARPU in Zimbabwe for Econet.? M sure LSM knows.

  11. The headline may be factually correct, but it’s misleading in our context. Econet should have been specifically referrer to as Econet Global, whilst Telecel should have been referred to as Telecel’s interests in Burundi and CAR.

  12. This is a deliberately misleading headline. Integrity is not accumulated, just like honesty cannot be partial. H Metro style headlines have no place in tech news.

    1. Well said. This is actually becoming a worrying trend with Techzim articles. This TechMetro stuff they are now doing will lower the cred they have earned. There was another article recently about USSD killing corruption.

  13. There is nothing misleading about the headline. Econet DID indeed buy Telecel (i.e. Telecel Burundi, branded Leo, and Telecel CAR) which were 100% owned by Global Telecom Holding (GTH), itself being indirectly owned by Vimpelcom through the latter’s 51.9% equity in GTH. As far as Telecel Zimbabwe is concerned, it is 60% owned by GTH (which is 51.9% owned by Vimpelcom) and 40% owned by the local consortium, Empowerment Corporation. Telecel Zimbabwe has structural problems from a shareholding perspective and is currently in a ditch operationally and financially due to historical under investments and short term and stop gap measures being applied to the business. The company is failing to strike a balance between the inextricable demands of short term operational performance and long term strategic execution.

    The ongoing and skewed cost optimization initiatives will not yield any positive results unless they are supported by significant investment into network expansion, pioneering innovations and portfolio diversification while continuously scouting for opportunities for revenue growth as the voice market becomes increasingly saturated and thin. The days of positive elasticity of demand for voice services due to price decreases are over and MNOs such as Telecel need to step up to the plate and leverage the promise of IP based services and overlay services as voice diminishes as a commodity instead of bombarding the market with unsustainable promotions

    1. It is notable that telecel and netone give freebies but the problem is that it has only caused them to fall into a non going concern state.. They are insolvent and unnaturally they will be no competition to talk of..sad

  14. Why a misleading a headline? most of your reports seem to be biased towards econet. Why do you seek to write only the negatives of telecel as if econet is so perfect?

    I wonder when will you mention that econet simcards automatically wipe all data for us to been seen queuing at the ecoshops.

  15. Ummmmmhhhhhhh. This is interesting indeed. I think Techzim is just doing its job on this article- ie reporting it as it is. Well done guys. I think you should remain factual and avoid playing PR for anyone. That way you win more viewers and therefore increase traffic to your site!

  16. It’s good that TELECEL ZIM is currently out of the deal, otherwise that would be bad for competition given Econet’s monopolistic or oligopolistic tendencies and bullish business attitude and its extortive pricing model and its promotions which are almost meaningless. Econet’s impasse with BAZ over the USSD platform and its suggestion to BAZ to build its own mobile network if they don’t want its terms and conditions, its high Ecocash charges, its direction to its Ecocash Agents not to double as Telecash Agents (until RBZ intervened), its inter-connection switching off of NetOne & Telecel, its moving of all post paid clients to prepaid in Nov/Dec 2008 for false reasons, inter-alia, is testimony of the same.

    It’s a pity that though the Econet Zimbabwean entity has made Econet Global what it is today, Econet subscribers in Zimbabwe have not reaped value for money harvests for having propelled Econet to greater international heights.

    As a matter of fact Econet is trying to make as much US dollar hard currency as possible in the Zimbabwean market to finance its international expansion as ZIM is an easy forex source than the other markets. However this submission of mine might need to be taken with a pinch or bag of salt, given that Econet had massively reduced its voice tariffs about 14 months ago, but was ordered by POTRAZ to revert to the higher tariffs.

    Despite the foregoing reservations, I still hold to this hypothesis if not theory, that given that Econet has not offered other more meaningful promotions to its ZIM market like TELECEL & Net One! Further, its price maker or market leader position has even made Telecash charges more or less like Ecocash charges!

  17. you guys next time put correct headlines ,because l had already blown the news on whatsapp groups how shame its going to be for me when the people l was telling finally found out the truth.

  18. Click bait! No matter how you justify that headline, you knew what everyone would think and you went ahead and did it anyway. If you were to argue your side in court, you would win because as you say, Econet did indeed buy “Telecel Comapanies”. But for journalistic intergrity (and yes, I know its a blog), serious fail.

  19. We shouldn’t have to argue about whether techzim is ryt or not. The moment you find even the smallest percentage of debate about your blog, something is wrong. From your track record, i still think you could have found a better more reflective headline. It is a matter of time before you really become mediocre if this trend is justified and is let to continue.

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