AudiencScapes

by Tawanda Karombo

tawakarombo@yahoo.co.uk

17 June 2010

(Harare, Zimbabwe)--The government of Zimbabwe intends to privatize NetOne, the country’s first mobile telecommunications company, in a move that could spark a scramble by investors. NetOne – which has been overtaken by Econet Wireless in terms of both revenue and services as the first choice for subscribers – is viewed by both local and international investors as having vast potential for growth.

State Enterprises and Parastatals Minister, Joel Gabuza recently said that about 11 underperforming parastatals would be privatized to enhance their profitability. Another state run ICT company, fixed telephone services provider Telone, has been identified by the unity government for privatization.

The managing director for NetOne, Reward Kangai confirmed the latest move and said that the privatization move would benefit his company as this would enable the coming on board of a private technical partner and investors.

“The move, if it happens, would complement the current Netone expansion programme,” Kangai told the state controlled Herald newspaper. He added that under the current expansion phase, Netone has installed and commissioned 60 base stations across the country.

NetOne, which is currently saddled by a US$28 million accrued debt, claims to have about 500,000 subscribers, but Kangai has said this will rise to two million by the end of the year.

Despite the US$28 million debt, Netone managed to obtain a US$45 million loan facility from China’s Export and Import Bank last week. “This facility will provide additional switching capacity and by the time we are done, we should have more than seven million capacity on our network,” the Herald Further quotes the NetOne boss.

Industry sources told AudienceScapes that Netone – which is bringing World Cup soccer matches to blacked out Zimbabweans through fan parks across the country – has also struck an agreement with software engineers from Afrosoft for them to develop lotto gaming using their mobile phones.

Local media reports indicate that Netone signed a confidentiality deal with South Africa’s MTN, in a move seen as the first step in a bid by MTN – Africa’s largest mobile telecommunications company – towards acquiring a stake in Netone.

Econet, a rival mobile company, revealed last month that it plans to spend US$300 million this year to expand its voice and data services as it aims for more rapid growth. It currently has 4 million subscribers.

Meanwhile, MTN said this week that it had ended talks with Weather Investments to buy $10 billion worth of assets in Orascom Telecom Holdings. MTN was hoping to offset growing competition in South Africa by further expanding to other regions but it seems the company’s fourth and latest bid within two years has not materialized.

Tawanda Karombo is a journalist living in Zimbabwe.

Other Blog Posts by Tawanda:
Zimbabwe: New Dailies Launch, Usher in New Era for Print Media
Zimbabwe: ICT Bill Raises Hopes, Despite Governmental Risks
Is Zimbabwe's Media Sector Poised for Renaissance?, We'll Know in July