Telecel saga splits cabinet

High-level official sources said this week cabinet was sharply divided when it met on Wednesday as Mugabe, supported by hardliners, pushed for the company's closure and seizure by government, while some ministers wanted it taken over by private investors. Yet another group demanded a market-based solution to the impasse.

Sources said Mugabe and his hardliners want the company to close shop because "it has too many dirty hands and is involved in a lot of off-shore trading of shares which does not benefit Zimbabwe".

Some ministers, however, said Telecel should be sold to private investors since it has more than 1,000 employees, US$3m circulating in Telecash (a mobile money transfer platform) and two million subscribers.

Another group of ministers is calling for a market-based solution to the on-going saga where government is not involved at all beyond its regulatory role.

"Some ministers are saying the shares should just be sold to the private entities where government has no role," said the source.

Last month, Postal Regulatory Authority of Zimbabwe (Potraz) revoked the Telecel licence after the company allegedly failed to comply with licencing requirements despite constant warnings and reminders over the past 15 years.

The saga spilled into the courts until the judiciary this week ruled that Potraz blundered when it cancelled the Telecel licence and gave the operator 30 days to wind up its operations.

In delivering his judgement over the Telecel saga, High Court judge Justice Nicholas Mathonsi said: "There has been an infringement of Telecel's right, which if allowed to perpetuate, would adversely prejudice the applicant and its employees."

"It is a truism that the first respondent (Potraz) has acted in an overzealous and precipitate manner without regard to the rights of stakeholders in this matter."

The judge said in terms of section 68 of the constitution Telecel had a right to administrative conduct that was lawful, prompt, reasonable, impartial and both substantively and procedurally fair.

Since its inception in 1998, Telecel has gone through major changes in shareholding, a development believed to have retarded stability and long term planning.

Government sources also said Information Communication Technology minister Supa Mandiwanzira who presented the Telecel saga to cabinet on Wednesday said the issue had too much political interference as locals who want to grab Telecel are doing so using their political muscles.

Last week Mandiwanzira told a Parliamentary Portfolio Committee on Information Communication Technology that Telecel had failed to pay its licence renewal fees.

"In the negotiations between Telecel, government and Potraz, Telecel appealed on an extended period to pay the US$137.5m renewal fees, and they further made a commitment to pay US$14m upon signing the agreement and pay the balance over a period of seven years. Despite the leniency shown by government on the payment terms, Telecel failed to pay the US$14 million as agreed," Mandiwanzira said.

"On the date of signing the agreement, Telecel only paid US$8 million and it took them 19 months to pay the outstanding US$6m.

"Telecel International is 100% owned by Global Telecommunications which owns Vimpelcom based in Netherlands with 56% of its shareholding held by a Russian billionaire, and they make US$20bn per year and have 30 million subscribers in Bangladesh. This is a big company, which never failed to pay licences in other countries, but has defaulted in Zimbabwe."

Sources said Mugabe's position is clear that Telecel is operating illegally and should thus shut down.

"His position is that Telecel is operating illegally since its licence and frequency have been withdrawn," a source said adding: "He was shocked how the company is still operating after the Potraz decision.

"Mugabe is also aware that there are some individuals in cabinet who are aiming to take over the company hence he is sticking to the position that if it is closed, it is only government which should take over."

The Telecel saga was triggered by a shareholding wrangle which has been going on for long and the company has since 2013 failed to address the shareholding disputes.