According to ICT Minister Supa Mandiwanzira, there are foreign investors that have tabled bids to buy shareholding in state-owned mobile operators NetOne, Telecel as well as fixed operator TelOne. The offers are for both the controlling and majority equity stakes in the companies.
The bids come in at a time both companies are in need of capital injection if they are to compete with the market leader, Econet in any meaningful way. According to Mandiwanzira, NetOne and Telecel combined need in excess of US$500 million in fresh capital injection for network expansion and other purposes.
TelOne has requested the government to take over it’s $347 million legacy debt. The debt is said to be deterring potential investment in the company.
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Mandiwanzira’s Statement in the Standard:
Yes, there is an interest in people to buy stakes in NetOne, Telecel, and TelOne. As you know, the president is saying we are open for business and we will look at every proposal, on its merits and demerits and make a decision on that basis. But of course, this is not a decision that can be made by me as a minister. I have to take it to the cabinet, my principal and a decision is made at that end. We have had inquiries on buying equity, interest in government-owned networks, with some offering to buy entire shareholding and some offering to partner with the government and inject capital for the expansion of those networks. But as far as I’m concerned we are open for business and we will look at every proposal we receive. We will look at the money being offered and obviously make a decision based on that. That’s the general attitude and we are open for business. Being open for business does not mean that you close any offers but when you receive offers you can then determine whether it’s worth it or not to sell the asset or is the asset that they want worth selling at this stage. There is a huge investment that could come into Telecel in terms of expansion of the network; anything between US$30 million to US$100 million would do the company very well. NetOne would require an investment of not less than US$400 million for it to be really in a position to compete with its peers in the market and of course there is a huge investment required in TelOne to finish its national backbone that it has a responsibility to build.
If the government does accept an offer for Telecel they would have made good on their promise. At the time Telecel was bought by government Mandiwanzira indicated that the government would be looking to sell the company within two years.
It will be interesting to explore what impact foreign investment will have in the state owned telecoms entities if it does happen. Maybe we will speculate on that a little….