Telecel shut down
Happiness Zengeni Business Editor
THE Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) yesterday cancelled Telecel Zimbabwe’s licence as a mobile network provider, giving it 30 days to wind down operations.Potraz said Telecel had failed to comply with licensing and indigenisation requirements.
The regulator has given Telecel a special licence allowing the company to operate under the same terms and conditions as a licensed operator only for 30 days, a period which will allow the company to, among other things, facilitate the migration of subscribers from Telecel to either Econet or NetOne.
The network operator is not allowed to register new subscribers, neither will it be permitted to seek additional or new resources to offer national cellular telecommunications services.
The mobile company is also required to notify the general public of the cancellation of its licence and to begin the process of decommissioning its telecommunications equipment which has to be completed within 60 days.
Telecel can appeal to the Minister of Information Communication Technology against the decision.
Yesterday, the company appeared determined to fight, insisting that Potraz’s decision was “unwarranted”.
“This measure is unfair and unwarranted. Telecel has made every effort to comply with all legal and governmental requirements in Zimbabwe, and objects to this treatment in the strongest terms,” the company said in a statement.
“Telecel and its global shareholders are taking immediate action both locally and internationally to challenge this decision. Telecel would like to assure its customers and stakeholders that it will take all possible steps to maintain the full range of its services throughout this process.
“We thank all our valued customers and partners for their on-going support. Your welfare is of the utmost importance and priority to us and we will continue to act in the interests of Zimbabwe and its people.”
Telecel has for 13 years failed to regularise its shareholding structure as required by law and has been operating without a licence.
In its order dated April 13, but only made available yesterday, Potraz said: “Having regard to the provisions of the Act, Telecel licence conditions, persistent compliance default, all relevant evidence and the submissions made by Telecel Zimbabwe Limited, Potraz hereby makes the following Order in the exercise of its powers under the Act.
“Telecel’s licence to provide National Cellular Telecommunications Services is hereby cancelled with effect from the date of delivery of this order.”
The effect of the cancellation means that the radio frequency allocated to Telecel will also be withdrawn.
The cancellation of operations follows efforts by the regulatory body to have Telecel comply with its licence fee requirements.
Early this year, Telecel was reminded of its non-compliance and the withholding of its licence document in a letter dated January 6, 2015.
Telecel has been operating on a special dispensation pending the fulfillment of the condition to regularise its shareholding so as to comply with the indigenisation laws of the country.
“Pending fulfillment of the condition on shareholding, Potraz withheld the licence document which it had prepared for issue to Telecel and which Telecel had been given a prior opportunity to peruse. Potraz advised Telecel of the withholding of the licence document in its letter dated September 18, 2013,” Potraz said in the order.
“Telecel failed to meet the shareholding condition despite reminders by Potraz culminating in a meeting held between Potraz and Telecel on January 22, 2015, with Telecel bringing along representatives of both its shareholders to the meeting.”
At the meeting, both Telecel and its shareholders undertook to submit a new shareholding proposal by February 28, 2015, for approval by Potraz in line with the legal requirements. This undertaking was confirmed by Telecel in writing in its letter dated January 30, 2015.
“No such proposal has been submitted to date by Telecel to Potraz for approval. Instead, Telecel International, in a letter dated February 27, 2015, and signed by John Swaim in his capacity as the Chairman of Telecel International Limited as well as managing director of Telecel Zimbabwe Limited, advised Potraz that Telecel now had a plan to regularise its shareholding through discussions with some unnamed investor,” Potraz said.
Given the chronology of events, Potraz concluded that Telecel has been unable, unwilling or not interested in complying with the material condition pertaining to its authorisation to operate a cellular telecommunications service in Zimbabwe, given that for more than 13 years Telecel failed to regularise its shareholding structure as required.
“Potraz, therefore, gave Telecel a notice of intention to finally cancel the licence in terms of Section 43 of the Act, on March 5, 2015,” said Potraz.
The move puts an end to the Telecel Zimbabwe saga whose operations and potential thereof have been eclipsed by shareholder wrangles.
The mobile network operator is practically bankrupt with no ability to meet its short term and long term liabilities.
The depletion and stripping of cash in Telecel through various instruments has been to such an extent that the company was unable to pay the licence renewal fees. All the cash that has been generated since inception in 1998 has been stripped out from the company to a point where it is running on overdrafts.