TelOne is looking for a hundred million dollars, full stop

Back in March this year, Zimbabwe’s telecoms regulator, POTRAZ, revealed that it had granted TelOne the fourth GSM license in Zimbabwe. The Zimbabwean government now effectively has two GSM licenses as a result.  The other is through NetOne. A GSM license is a treasured asset world over, more so in Africa where mobile telephony uptake has been nothing short of a revolution in recent years.

When we posted the article in March, we mused that the government was looking to draw in some foreign investment into the booming mobile telecoms sector using the license. Even the POTRAZ deputy director general didn’t hide that TelOne was not ready financially to do anything in the mobile telephony space. He admitted that POTRAZ would deliberately be lenient with TelOne by not giving it a fixed timeline to roll out services.

Yesterday, Zimbabwe’s news agency, New Ziana, revealed that TelOne has engaged foreign investors to raise some US$ 100 million required to operationalise the license. According to TelOne acting managing director, Hampton Mhlanga, nothing has been concluded yet with any investor. The company needs a figure between US$ 50m and US$ 100m he says.

Mhlanga is quoted in the article: “The introduction of mobile services will ensure that we will be able to reach all those areas we could not because of vandalism and cable theft on our fixed line network.”

His statement doesn’t sound right to us. Why start a huge new division at a company struggling to offer basic fixed telephony services? The reason TelOne is where it is has little to do with vandalism or cable theft. The two are common enemies of fixed infrastructure in this region and measures to guard against them can be planned for adequately.

Why would TelOne want to compete against NetOne?  More clearly, why would the government compete against itself? It’s not like they’re giving up on NetOne.

As far as we can see, the answers point to one suggestion: TelOne is not interested in mobile telephony at all in the long run. The cash, more likely. TelOne is looking for a hundred million dollars, full stop.