Telecel shareholder drama eases as MNO looks for cash to fund expansion

The countries smallest mobile network operator (MNO) Telecel hasn’t had the best half-decade. The company has seen a sharp decline in subscribers on the network as well as its mobile money arm Telecash which now only has around 5000 subscribers nationwide. In a report by The Chronicle, there might be a light at the end of the tunnel as Telecel’s shareholder disputes have subsided and the MNO is now looking to fund an expansion that will aid the company in capitalising on the digital boom.

Shareholder drama

A component of Telecel’s issues has been the infighting among some of its shareholder particularly the Empowerment Corporation (EC). In a report by The Business Times, EC members have been vying for control of the group’s stake in Telecel. The chief culprits of the EC infighting have been Dr Jane Mutasa and Dr James Makamba.

As if that was enough other parties have come in claiming a stake in Telecel and the list includes, Philip Chiyangwa, Farmers Union of Zimbabwe, National Miners Association, Gerald Mlotshwa (lawyer), the nephews of late President Robert Mugabe, Leo Mugabe and Patrick Zhuwao.

The late President Robert Mugabe according to reports went as far as blocking his daughter Bona Mugabe, Simba Chikore (his son-in-law) and Leo Mugabe from using the family’s name and political connections as a way to seize control of Telecel.

“Sometime in 2015/2016, Mugabe’s son-in-law and his wife, and also separately his nephew wanted to use their family and political connections to gain control of Telecel. They approached the then Minister of Information Communication Technology (Supa Mandiwanzira) to assist them to take over Telecel. First, it was Simba and Bona, and then later it was Leo Mugabe”
The NewsHawks

All of this infighting and attempts at grabbing control have meant that Telecel has slipped down the rankings due to a lack of a shared vision. This is evident when we look at the figures turned in by POTRAZ. Telecel was the only MNO to lose subscribers registering 725 427 in Q4 2020 from the 727 094 in Q3 2020.

Building bridges and mending relationships?

Telecel Chairperson Selby Hwacha said that they have made progress in resolving disputes and they might finally have a shared vision. The company is now actively looking for ways to raise capital in order to fund an expansion and improve its services.

“There are a couple of initiatives to raise capital, Telecel is a very attractive proposition. It is the least borrowed network; it’s easier to get into a relationship with us. That makes it attractive for equity adjustments, joint ventures, lending but I can’t get into specifics because of non-disclosure expectations.”
Selby Hwacha, Telecel Chairperson (via The Chronicle)

It will be interesting to see how long this new peace among the Telecel shareholders lasts. As well as if they can rally the necessary investment in order to improve service delivery which will, in turn, make the carrier market more competitive.

Telecel’s higher-ups should also look at increasing and diversifying their data offerings. There are a number of new needs that have emerged in the wake of the pandemic and others that have always been there but haven’t been met.

One example is broadening bundles to include apps like Telegram and Signal which are gaining in popularity. Another would be following the move that Cell-C made and offer data bundles that last more than a month. If Telecel can implement products along these lines, or through its internal process find ones better, then it will be an enticing proposition for the market.