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TelOne engages POTRAZ

TelOne engages POTRAZ


TelOne, a Unified Telecommunications Company, has engaged the regulator, Postal & Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) over immediate power tarrif review amid rising operational costs that are threatening the company’s viability.

While addressing journalists in Harare on Thursday during a two-day engagement, Lawrence Nkala,TelOne CEO has said the telecommunications solutions provider was in trouble and needed prompt government intervention on tariff review.

“The telecoms industry continues to engage the regulator over the current tariff for the survival of the industry. As TelOne we sell predominantly in ZWL$ as we are a parastatal,” Nkala said.

“POTRAZ gives us tariff adjustments as a sector from time to time, which is applied by all Operators as a percentage either in part or in full.”

Nkala bemoaned that POTRAZ only give telecoms sector tariff review twice a year if they are lucky.

This has led to serious value erosion following the Zimbabwean dollar volatility.

“If we are lucky, we receive tariff review twice a year a year but we usually get it once a year and this is not viable owing to exchange rate volatility,

“The industry and TelOne in particular is affected by the delay in approval of a tariff that is index linked to the United States Dollar (US$). The regulator approved a ZWL$ tariff once in a while,” Nkala said.

He said prices of all utilities such as electricity, fuel including taxes have been reviewed several times since the last review.

TelOne has come up with US$ products to cushion it’s operations against exchange rate volatility.

“TelOne recently added new bundles and now we have a range from US$5 to US$200. The US$ bundles are promotional bundles available to customers with free funds. Customers can still swipe for bundles from 30gig to unlimited using local currency,” Nkala said.

The telecoms solution provider is pursuing a fixed-mobile convergence to augment its current technological offering.

Nkala said the company realises that growing the business using new technologies will require US$250m to position the company as a modern communications solutions provider.

Currently, the company is choked by legacy debts of US$390m as of January this year due to debtors and failure to pay by clients

TelOne is now owned by the government through the Mutapa Investment Fund.

 TelOne has been making steady progress through internally generated funds, managing to generate and invest an average of US$10m annually in the last three years due to the absence of capital injection from the shareholder as well as other financiers.

Nkala said some of the progress made include the deployment of the Harare-Masvingo-Beitbridge and Harare-Bulawayo-Beitbridge backbone fibre, which ensured improved bandwidth capacity coming into the country at a lower cost, in the process enhancing TelOne’s resilience.

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