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Telecoms: Zimbabwe’s NetOne dreams big

Posted on Tuesday, 24 June 2014 09:00

NetOne aims to increase its subscriber base to 3 million by December but requires a strategic investor to inject $570 million to expand its network.

If implemented, the project will change the telecommunications landscape in Zimbabwe

Chief executive officer, Reward Kangai told the Parliamentary Portfolio Committee on Information Communication Technology they now have between 2.7 and 2.8 million subscribers, 18 percent of the market share.

“We are targeting 3 million subscribers by December 2014. I think we are on course to meet that target,” he said.

Despite being the country’s oldest mobile phone operator, NetOne has fallen behind the other two networks – Econet and Telecel — in terms of subscriber numbers.

Kangai said $570 million was needed to put up 3,000 base stations at an average cost of $250,000 per rural base station.

Currently, they have between 600 and 700 base stations.

NetOne was negotiating with China for a $218 million loan to set up 4G networks, but claimed that rivals with “a hidden agenda” were trying to kill the project.

“There was a lot of bad publicity and initially, the loan was supposed to be $298 million and it was reduced to $218 million,” he said without elaborating on the conspiracy.

“If implemented, the project will change the telecommunications landscape in Zimbabwe.”

Anticipating an increase in clients, NetOne has already ordered an additional 1 million SIM cards to prevent shortages.

Kangai said revenues had been rising steadily from $93.7 million in 2012 to $105.5 million last year.

However, its finances are not rosy, as the government owes the company $1.6 million, while NetOne has a loan debt of $16 million.

The tax collector Zimbabwe Revenue Authority (ZIMRA) also plans to garnish NetOne’s bank accounts for an uncollected debt of $30 million owed by subscribers defaulted during the Zimbabwe dollar era.

“The uncollected debts by our customers stand at $30 million and they used our network and did not pay and Zimra wants its 15% tax, yet we did not collect the money,” he explained.

“Last year, our financial statements were showing profits, but ZIMRA came and put penalties for non-payment of VAT for revenue we did not collect.

“It is affecting our profit base, which had indications it would be a $3 million profit.”

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