Telecel Zimbabwe’s licence still in peril over local shareholding

Zimbabwe’s government has reportedly refused to renew the mobile network operator licence held by Telecel until it complies with foreign shareholder limits that require a majority of the company to be owned by local shareholders.

Currently the company is 60 per cent owned by Egypt’s Orascom Telecom (now a subsidiary of VimpelCom), with the remainder held by a company with close links to President Mugabe.

Earlier in the week, management from Orascom Telecom held talks with government officials to try and untie the deadlock, but multiple reports in local media suggest those talks broke down without success.

Despite the failure to renew the operating licence, Telecel is still providing phone service to customers, although it is not clear for how long that will be allowed.

If the two sides can agree on a settlement, then Telecel will also be required to pay US$137 million for the 20-year extension to its licence. There have been suggestions that VimpelCom would prefer to sell the company rather than pump even more money into an operation that it would have lost management control over.

Telecel Zimbabwe, with 2.5 million customers is the country’s second biggest mobile phone operator after Econet Wireless.