TelOne in bid to recover $264m debt

Fixed telecommunications services provider TelOne said on Friday it is owed $264 million by various players across the economy including the Government, and is making strides to recover the debt.

It is also battling to keep its operations afloat in an increasingly competitive environment.

Managing director Chipo Mutasa told an annual general meeting, which Finance and Economic Development Minister Patrick Chinamasa attended, that the firm had collected $52 million from debtors in the first six months of this year.

“Debts that we think are collectable are in excess of $150 million,” she said.

According to the breakdown, corporates and SMEs owe $92 million, households $83 million, the Government $41 million, parastatals $36 million and local authorities $10,6 million.

The State-owned telecommunications firm on the other hand owes $129 million to various suppliers.

Mrs Mutasa appealed to Government to re-instate an offset arrangement between parastatals that allowed them to address debts that they owed each other.

She said the firm was also saddled with a $348 million legacy debt, while requesting Government to have it addressed.

In an operations update, Mrs Mutasa said TelOne had recorded a drop in revenue to $49,4 million in the first half of the year from $60 million during the same period in 2015.

Voice services, the company’s cash cow, took a 20 percent knock in revenue while broadband services earnings increased by 10 percent.

High usage of over the top services such as Whatsapp was impacting on voice revenues, she said.

“In the outlook, current challenges in revenue are likely to persist,” Mrs Mutasa said.

She said the firm was currently updating its network through a $98 million Chinese loan that was arranged by Government.

In response, Minister Chinamasa urged the telecommunications firm to focus on providing internet services and other new products to diversify its income.

He said State-owned companies in the telecommunications sector were better poised to make money and become “cash cows” for the Government.

“My interest is that you will one day contribute meaningfully to State revenue,” he said.

Minister Chinamasa said the offset arrangement could be explored to address past debts, after Mrs Mutasa said the Zimbabwe Revenue Authority had garnished TelOne accounts and took about $7 million.

He lauded the firm for holding the AGM, a rare feat for parastatals and for realigning its salary structure through cutting salaries by 15 percent last year.

“It was a very courageous and brave decision,” he said, while urging the Government and other private sector players to follow suit in recognition of the challenging operational environment characterised by high costs of doing business. — New Ziana.