HARARE - Zimbabwe's smallest cellular network operator NetOne Cellular is wriggling to extricate itself from a financial crisis, with sources indicating the company was in a financial black hole after being deserted by contract subscribers last year.
The troubles at the state-owned mobile phone company are said to have put off Africa’s cellular giant MTN Group, which had been courting the firm for a 49% stake in its bid to enter the Zimbabwean telecommunications market. MTN is said to have given the company a cheap valuation early this year led, but its offer, which included a comprehensive turnaround plan, had been turned down by the NetOne board.
Now, NetOne’s woes are said to be mounting, with insiders saying out of a subscriber base of 500 000, active customers amounted to around 100 000. “A lot of the contract customers left after getting hefty bills when the economy dollarised last year. The company did nothing to retain these customers, who were the major source of income, so they could have joined other networks,” a senior NetOne employee told Bizcommunity.
Despite having had a two-year lead over rivals, Econet Wireless Zimbabwe and Telecel Zimbabwe, NetOne is now the smallest operator in the country. NetOne’s managing director, Reward Kangai, was recently quoted saying that he was
targeting growing the network to seven million subscribers after securing a US$45 million loan from China’s Eximbank. The loan, secured in June, was issued after Eximbank satisfactorily conducted a due diligence exercise that confirmed NetOne’s solvency and its ability to repay the loan, Kangai had told reporters.
The problems at NetOne were being compounded by an exodus of technical staff to rival operators. Kangai had not responded to questions sent to him by Bizcommunity on 15 September 2010. The questions had been resent to the NetOne MD on 20 October 2010 but were also not answered. – Bizcommunity
Post published in: Economy