NetOne’s new operations chief faced with enormous task of public entity turnaround

In 2015, NetOne, Zimbabwe’s second largest mobile operator underwent a management shakeup which its shareholder, the government, had enforced as a way of steering the operator to profitability.

One of the changes just recently took effect at the beginning of February 2016 as NetOne announced the appointment of a Chief Operating Officer. The newly created position will be taken up by Brian Mutandiro, the former chairman of the telecoms regulator, POTRAZ. Mutandiro will work alongside NetOne’s current Chief Executive Officer, Reward Kangai.

Mutandiro’s appointment comes at a crucial point in Zimbabwean telecoms as NetOne and every other operator faces several challenges in containing revenue losses caused by disruptive technologies, adapting to regulatory changes that affect the bottom line such as tariff adjustments and increased levies, as well as operating in a turbulent economic environment where subscribers’ disposable incomes are dwindling.

NetOne hasn’t fared too well in the environment. In its unaudited financial results for the half year ended June 2015, the operator registered a $5,8 million loss, with the performance being heaped on operational challenges specific to the Zimbabwean telecoms terrain.

The good news, though, is that the operator has enjoyed some positive numbers, maintaining consistent subscriber growth leading to its current total of 3,8 million active subscribers. These numbers have even inspired a 2016 revenue target of $150 million, a number influenced by the revenue growth trajectory that saw NetOne record $110 million in 2014 and over $121 million for 2015.

What’s the COO’s role in all this?

NetOne carries the additional burden of being a public entity burdened by bureaucracy while trying to establish competitiveness in a market and industry where quick decisions and actions are made and taken in competition with private sector companies.

To ensure any chance of effectiveness, NetOne has to be run with a private sector mentality where results delivery is a huge priority. According to the Minister of ICT, Supa Mandiwanzira, the State expects NetOne to be able to achieve this, especially since it’s the same approach taken by TelOne, another State-owned telecoms company which has managed to become profitable and create strong competition in the fixed broadband market.

To achieve its own turnaround story, NetOne will have to identify opportunities for revenue growth through service creation and optimisation of its network resources while ensuring adequate performance measurement.

As a former head of the now-disbanded Post and Telecommunications Corporation (PTC) and business leader in companies like PG Central Africa, Coca-Cola, and Innscor Africa, Mutandiro will have to champion such a reformative drive, where inefficiencies and tendencies for resource mismanagement that are common in public sector corporations are thrown out.

Then again, this is a parastatal appointment, so it’s hard to say whether Mutandiro is the best man for this job or another political appointee. His credentials reflect a lot of private sector experience, which is a plus for NetOne as it goes on the private sector offensive.

However, his involvement with PTC and subsequent dismissal on charges of impropriety makes it hard to write him in immediately as the corporate saviour needed at NetOne. That can only be determined after he takes on the challenges in NetOne’s restoration that lie ahead.