TelOne could lose West Indian Ocean Cable Company stake
By Staff reporter | 17 Apr 2019 at 08:13hrs
Fixed telecommunications services provider TelOne is at risk of losing its shareholding in bandwidth wholesaler West Indian Ocean Cable Company managing director Chipo Mutasa has said.
TelOne has been struggling to meet its United States dollar obligations to the tune of US$10 million.
TelOne is sitting on letters of demand, worth a total of US$22 million, from foreign suppliers. Telecom Capital Finance, based in Mauritius, has threatened to seize TelOne's share of the West Indian Ocean Cable Company (WIOCC) over a $1.1 million debt.
TelOne, has been threatened with service disruption by critical foreign suppliers, who include West Indian Ocean Cable Company (Wiocc) and China-EximBank, among others, over an $18 million debt.
According to a report from the chairperson of the Parliamentary Portfolio Committee on Information Communication Technology, Postal and Courier Services, Charlton Hwende, TelOne owes four critical foreign suppliers about $18 million.
"TelOne has been threatened with service disruption from critical foreign suppliers, who include Wiocc, TDM Mozambique, TCF and China-EximBank, who are owed $18 million," the report said.
TelOne owes China-EximBank $500 000 in interest and repayment on the $98 million loan facility which funded the phase 1 National Broadband Project (NBBP).
"This arrear obligation is affecting plans for phase 2 of the National Broadband Project, which is set to expand and upgrade TelOne's network," Hwende said.
"Any disruptions of internet service by TelOne will have a catastrophic impact on government business and the economy at large. Such a disruption will have a damning effect on the country's communications systems, national security, TelOne's reputation and the effect on the economy at large cannot be overemphasised," he said.
TelOne, despite its legacy debts, can be an attractive prospect for investors. The company has its roots in fixed telephony, but, under CEO Chipo Mtasa, it has been successfully shifting focus towards broadband in recent years as voice revenues plummet worldwide. Internet services accounted for 38% of TelOne revenues in 2017, up from 29% in 2016.
TelOne's blended average revenue per user (ARPU) – a measure of how much each customer spends on the network – is US$27. However, for broadband alone, ARPU stands at US$409.
TelOne has the widest network coverage in Zimbabwe anchored on its robust backbone infrastructure, fibre, satellite and traditional copper. It delivers high internet bandwidth to the ordinary Zimbabwean at the lowest prices due to its shareholding in the West Indian Ocean Cable Company (WIOCC), which has a major stake in the East African Submarine System (EASSy) cable as well as West Africa Cable System (WACS).