The Zimbabwean government is in talks with South African telco giants Telkom and MTN with regards to the sale of its mobile network operator NetOne and its sister telephone and internet service provider, TelOne.
“We are aware of this (Telkom and MTN interest) but we are saying that government will get better value for money if these are floated together as a package,” said Mthuli Ncube, Zimbabwean Minister of Finance and Economic Development at Tuesday’s post-cabinet media briefing in Harare.
This is part of Zimbabwe’s move to save the country which is experiencing severe economic issues. The country expects to raise $350 million from selling shares in five state-owned telecommunications companies and a bank.
Mthuli Ncube said that the government will be merging the entities under a Special Purpose Vehicle (SPV) as it moves to partially privatise the two parastatals which are burdened by legacy debts and losses of more than $100 million. He also revealed that the government was considering discarding 60 percent of its shares of the merged venture.
It would be recalled that in 2018 the then Finance and Economic Development minister Patrick Chinamasa told the media that TelOne, alongside the Infrastructure Development Bank of Zimbabwe, Zimpost and the People’s Own Savings Bank, NetOne and Telecel Zimbabwe would be partially privatised. But TelOne’s Managing Director Chipo Mtasa said it might be quite difficult for TelOne to be privatised as long as their legacy debts are not taken over by the government. In 2010, MTN also expressed interest in acquiring the mobile phone operator which has now incorporated mobile money and internet services. However, negotiations fell through due to the Indigenisation Act.
According to Ncube, Price Waterhouse Coopers (PWC Zimbabwe) is the transaction advisors for TelOne and government and the government will be engaging them for advice on the proposed sale of NetOne also. The negotiations between possible investors and government are set to be complete by September this year.
NetOne is Zimbabwe’s second largest mobile phone operator in terms of subscriber base with 5 million subscribers after Econet Wireless. TelOne is a member of the EASSY submarine cable through the west Indian cable company consortium. Its main business is voice which accounts for 54 percent of the market share and has about 258,000 voice subscribers.