adminAppearing before the Parliamentary Portfolio Committee on Media Information and Communication, he attributed the high rate of default to the continued rise in the cost of living.
“TelOne has a huge debtors balance due to non-payment of services consumed by both corporates and residentials, which is affecting the company’s cashflows,” he said.
“The continued rise in the cost of living and high unemployment rate has contributed to the increase in defaulters which resulted in the ballooning of the total amount owed by customers to $211 357 476 by the end of March 2012.”
Mr Mhlanga said of the total amount owed, Government institutions and departments owed the most.
He, however, said some customers were taking up the payment plan option put in place for them to clear outstanding balances.
He said the company collects at least $8 million per month out of $12 million generated.
He said during the first quarter of the year, TelOne generated $35,7 million, but only collected US$26,7 million.
“We have put in measures to try and collect more than we are doing but most people are not honouring their payment plans,” Mr Mhlanga said.
He said most of the revenue collected was being eroded by statutory liabilities and staff costs.
He said the company was being weighed down by a huge debt overhang, obsolete machinery and stiff competition from mobile operators.
Mr Mhlanga, however, said despite the challenges, the company was making progress in digitalising operations and expanding landline services.
“We have almost 350 000 fixed and wireless lines working against an installed capacity of 401 500,” said Mr Mhlanga.
TelOne has failed to connect more people to its landline network due to financial and infrastructure limitations.
As a result, the fixed telephone penetration rate has dipped drastically over the years as TelOne now has slightly over 300 000 subscribers after losing about 50 000 subscribers in the past two years.
The company has been earmarked by Government, together with 10 other parastatals for commercialisation. — New Ziana
Online Reporter