Harare – Global telecommunications giant, VimpelCom has disposed of its majority stake in Telecel Zimbabwe to a company owned by the country’s government for $40m.
The sale brings to an end the uncertainty that has dogged the Zimbabwean operator over regulatory compliance issues.
These included full payment of $137m in licence renewal fees and compliance with the indigenisation policy, which requires that foreign companies give at least 51% control of local companies to black locals.
The two parties – the government and VimpelCom – had apparently deadlocked on resolution of these issues, prompting Harare to toughen its stance on the foreign shareholders. This culminated in the government pressuring VimpelCom to dispose of its interest in Telecel Zimbabwe.
“The government of Zimbabwe put up pressure on the foreign shareholders and it has come as no surprise that VimpelCom has moved out of Zimbabwe,” said a telecom executive in Zimbabwe.
The government already controls NetOne, the other mobile operator in Zimbabwe which has about three million subscribers. Zimbabwe ICT Minister, Supa Mandiwanzira referred questions on the issue to Zarnet, a technology company owned by the government of Zimbabwe .
However, VimpelCom said on Wednesday that Global Telecom had “entered into an agreement with Zarnet (Private) Limited to sell its stake in Telecel International Limited for $40m”.
It added that “transfer of ownership to Zarnet will occur after customary conditions are satisfied”. The mobile operator has about 2.7 million subscribers in the southern African country while it announce last week that mobile money users on its platform, Telecash, had now surged to one million. The government has previously shut down Telecel Zimbabwe for failing to comply with indigenisation laws and failure to pay licence renewal fees. This is despite it having received respite from a court ruling that gave it room for appeal.The other Zimbabwean mobile operator, Econet Wireless, with about nine million subscribers, has also had run-ins with the government and has taken the government to court over a decision to cut mobile voice tariffs. Regulatory compliance by telecom companies across Africa has been brought under the spotlight after MTN was fined $5.2bn by the Nigerian Communications Commission (NCC) for failing to disconnect unregistered subscribers. Telecel Zimbabwe recently warned its subscribers to register or risk disconnection.