Zimbabwe’s NetOne considers sale of minority stake

Zimbabwean state-owned telco NetOne has confirmed that it is in talks with several overseas investors about taking a significant minority stake in the company. The company needs at least US$100 million in additional investment to maintain its network and catch up with its two larger commercial rivals.

Network expansion has typically been funded by internal funds, although the company was able to secure its first foreign loan in over a decade last year – for US$45 million from the Export-Import Bank of China for network infrastructure purchases.

"We are glad that the government has taken the decision to allow NetOne to partner a bigger player," Reward Kangai, NetOne’s managing director said at an investment conference in Harare. "The investment required by the network points to a global player with operations in many countries."

He confirmed that NetOne is in talks with South Africa’s MTN, and several other unnamed investors. An investor would be limited to a maximum 49 per cent stake due to existing laws restricting foreign control of telecom networks.

"There’s definitely need for the government to reduce its shareholding, governments are not in the business of running companies," he added.

The Zimbabwean government has been under pressure to sell its bloated state telco, but as resisted the move as NetOne is viewed as part of the government’s strategic assets, which it often uses to monitor civilians agitating for change within Zimbabawe’s political landscape.

Econet Wireless and Telecel Zimbabwe are the country’s other two licensed operators.