Telecel offers to cede unit control to keep licence

TELECEL Zimbabwe Ltd, a unit of wireless provider VimpelCom Ltd, offered to cede control of the company as part of negotiations with the regulator that led to the withdrawal of its local mobile-phone licence last week.

The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) on Wednesday ordered Telecel to shut down after cancelling its operating licence the previous day.

The regulator gave the company’s subscribers up to 30 days to switch providers.

Telecel proposed to transfer 11 percent of its shares to employees and therefore reduce foreign ownership to about 49 percent, the company said in a letter to employees.

“Telecel has done everything possible to ensure full compliance with all the licence requirements,” the company said.

About 60 percent of stake in Telecel is owned by Amsterdam-based VimpelCom through its Egyptian unit Orascom.

The company had been working with the government to resolve the licensing dispute after Information and Communication Technology Minister Supa Mandiwanzira said Telecel had failed to meet its licence fee payments and failed to comply with the country’s indigenisation regulations.

“We’re objecting to this treatment in the strongest terms,” Telecel said in the letter.

“Telecel and its global shareholders are taking immediate action both locally and internationally to challenge the decision.”

A committee of Telecel workers said they would appeal to the Office of the President to ensure the future of the company.

“In relation to the 11 percent offered to employees by shareholders as a way of regularising the shareholding structure in line with indigenisation regulations of the land, we believe we’re legitimate citizens of this beloved nation and deserve a stake in Telecel Zimbabwe,” said Telecel in a separate letter to employees.

Mandiwanzira could not be reached for comment.

Telecel competes with Econet Wireless Zimbabwe and state-owned NetOne.

VimpelCom, whose biggest shareholders are billionaire Mikhail Fridman’s Altimo group and Norway’s Telenor ASA, has operations in 14 countries including Russia, Algeria and Pakistan. — Bloomberg