Telecel, Africom (and Maybe NetOne?) to be Acquired by UK-Based Clear Mobitel?

Last month, when a UK-based company claimed it was going to invest $200 Million in Zimbabwe’s telecoms industry, we asked: “Are we being sold air pies by the telecoms firm that says it wants to invest $200m in Zimbabwe?“

See, the company Clear Mobitel, has no significant traceable operations in telecoms, despite calling themselves a “Global Telecoms Giant“. They are obviously not global, and they are not a giant, so this felt like some crude joke, a scam, or just a super secretive company.

So today, when we saw an announcement in the state-owned Herald, saying the investment deal has gone up to $1 Billion, and that the company is maybe acquiring Telecel, Africom and NetOne, things just got even weirder.

Really, as we read that article, we wanted our initial assessment of this “mega deal” to be wrong. We are Zimbabweans too, and we’d love it if Telecel and NetOne got some billion-dollar investment. But again, looking at CML’s online footprint, this still doesn’t make sense. A lot of information is missing, and we won’t start celebrating just yet.

The writer of the article says:

The signing ceremony between Prof Ncube and Mr Mann was held yesterday on the sidelines of the United Nations General Assembly meetings here, signalling the consolidation of the process.

An initial investment of $200 million will be made, followed by $350 million and then the balance in due course.

The African Development Bank and Afreximbank have been roped in to assist with financing.

“CML to acquire and operate the licence (Spectrum) and assets of Telecel Zimbabwe and Africom and form a joint venture with Mutapa Investment Fund to invest in the two companies that will provide the backbone of the fintech ecosystem” reads the MOU.

Furthermore, CML will set up data centres for both commercial and public use, again through a joint venture with Mutapa Investment Fund.

So the title says Telecel and NetOne will be “revamped,” but then inside the article, this changes to “Telecel and Africom.” Is it Africom or NetOne? Is it just an injection of fresh capital or an actual acquisition? The MOU extract in the article suggests an acquisition, but the rest of the article speaks of “an agreement to revive Telecel.” Both, maybe?

The mention of the ADB, of course, inspires some confidence. So we hope in time something substantial actually emerges from this.

Telecel does need a break

When we say we hope we’re wrong with the mega-deal skepticism, it is because of Telecel. The company has had a rough couple of years. A rough decade, actually. It was thrown into this limbo of painful, gradual decline following several years of shareholder squabbles.

We don’t know if these squabbles were resolved with finality. Probably not. And this is likely why no one has been interested in buying it.

The company is struggling along, with reports of hundreds of thousands of subscribers lost every year. In 2014, Telecel had some 2.5 million subscribers, today it’s down to under 300k.

Telecel coming back into the game means jobs for fellow Zimbabweans, more competition in the sector, and hopefully better service for consumers from all operators.

Africom

There’s not much to say about Africom, except it too was affected by shareholder squabbles around the same time, with some directors using their political connections to get rival directors jailed. It was a mess, and like Telecel, the beginning of the end for the company. It’s so bad that when you mention Africom in a conversation, people wonder if the company is still operational. It is.

Bottom Line

While the Clear Mobitel deal raises many questions, the potential benefits for Zimbabwe’s telecoms industry are significant. We are skeptical. But if this investment materializes as promised, it could breathe new life into struggling companies like Telecel and Africom, create jobs, and much-needed competition. However, until we see concrete evidence of Clear Mobitel’s capabilities and intentions, it’s wise to remain cautiously optimistic.

The government could be clearer on the detail and it would be great for it to provide updates on the progress of this deal, outside the propaganda pieces in the state media. Zimbabweans deserve to know if this is a genuine investment or just another ‘mega deal’.