Orascom Telecoms in talks with Government over the Telecel license renewal

The Egyptian owners of Telecel Zimbabwe, Oracom Telecom, revealed yesterday that they are in talks to sort out the license renewal issues they have with the government and local telecommunications regulator, POTRAZ, in Zimbabwe. The information was posted by Netherlands based, Telecompaper. According to the report, Orascom is in talks “over the terms and conditions” to renew the license after the government told them a condition to have their license renewed was them transferring majority ownership of the company to Zimbabweans. Telecel Zimbabwe’s 15 year license expires next month.

Orascom indicated yesterday however that the payload from any outcome of the license renewal talks have little consequence on the performance and outlook of the group as whole. Even though Orascom Telecom has 60% ownership in Telecel Zimbabwe, for some years now the group hasn’t included Zimbabwe in its consolidated financial results reports and said yesterday that the Zimbabwe operations represent a very tiny percentage of the group’s total revenues. As of December 2012, the whole group had a total 85 million subscribers, with Zimbabwe contributing 2.6 million of that.

The Government of Zimbabwe last week upped the mobile telephony license fee to $137.5 million for a 20 year tenure from the previous $100m for a 15 year license. Econet Wireless Zimbabwe, a competitor to Telecel and currently leading with over 60% subscriber market share, had its license renewed last week and are reported to have made a payment of $85m already with the rest to be paid before the end of the year.