TELECEL International, the Egyptian controlling shareholder in Telecel Zimbabwe, has committed to addressing its lopsided shareholding in the mobile phone operator by the end of this month in what will transfer majority interest to indigenous investors. Telecel International managing director Mr John Swaim was in the country last week for discussions with Government on how to sell 20 percent to indigenous investors.
Government last week agreed to renew Telecel Zimbabwe’s licence after the controlling shareholder committed to expedite the process to whittle down its stake.
This resulted in other local mobile phone companies that had cut interconnections with Telecel over its licensing which had expired in June, reconnecting the firm.
Telecel International, controlled by Egyptian mobile phone giant Orascom, will by the end of this month have reduced its stake in Telecel Zimbabwe from 60 percent to 40 percent.
Outgoing Transport, Communications and Infrastructural Development Minister Nicholas Goche last month ordered Telecel International to address its lopsided shareholding
Government directed Telecel International to engage fellow shareholders Empowerment Corporation over the disposal of the stake in line with the original terms of the licence.
EC holds the balance of 40 percent stake in Telecel Zimbabwe. Telecel International should have sold the excess stake five years after the licence was issued.
Telecel Zimbabwe did not respond to enquiries for official confirmation of the majority shareholders’ commitment, but sources said Telecel International promised to resolve outstanding issues relating to its skewed shareholding within a fortnight.
“They (Telecel International) have agreed to release 20 percent shareholding to indigenous shareholders. I heard negotiations will be done by the 31st of this month.
“They met local shareholders and agreed on the method and modalities to sell the equity to locals because they want to comply with the licence conditions,” the source said.
It is expected that when EC assumes a controlling interest in Telecel it would be able to influence strategic decisions that at present are made almost entirely in Egypt.
A substantial first payment out of a staggering US$137,5 million has reportedly already been paid to Government for the licence, which initially had a 15-year tenure.
Telecel Zimbabwe was first issued with a cellular licence in 1998 as part of Government efforts to empower locals. Telecel International came in as the technical partner.
While original terms of Telecel’s licence required indigenous people or entities to hold at least 60 percent stake in the firm, the Postal and Telecommunications Act requires locals to own at least 52 percent shareholding in any local telecoms company.
Zimbabwe’s biggest mobile phone operator, Econet Wireless, last month cancelled interconnections with Telecel arguing it was not a holder of a valid licence.
The interconnection was reinstated last week after Telecel was issued with a new licence bringing relief to subscribers of both companies who could no longer call each other.
However, the real bone of contention to Econet Wireless was alleged unethical conduct by Telecel, which had slashed tariffs by half in a bid to woo more subscribers.