Telecel Zimbabwe Shutting Down As POTRAZ Cancels Operating Licence

Telecel Zimbabwe is shutting down after the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) cancelled its operating licence on 1 February 2022, Techzim reports.

The authority is giving Telecel 30 days to wind down. In these 30 days, Telecel will be operating under a special licence and so will be able to offload customers to Econet and Netone as well as other company dissolving activities like engaging creditors, making employee exit preparations etc.

During the month, Telecel is not to register new subscribers.

POTRAZ say their decision is final and so is not allowing Telecel to obtain additional funding to fix its problems either.

In 60 days’ time, Telecel should have completed the decommissioning of its network equipment.

Telecel is required to notify the public that its licence has been cancelled. Instead, they are promoting their data bundles on social media, hardly what you’d expect from a company that’s being shut down. That’s because Telecel intends to appeal POTRAZ’s ruling and the regulations say they can appeal to the Minister of ICT.

Telecel was given over 13 years to comply with the regulations for an operator to provide National Cellular Telecommunications Services in Zimbabwe, but they have failed to do so.

The main issue is that of the makeup of their shareholding. According to indigenisation laws in the country, Telecel should have reduced foreign shareholding to 49%. Telecel has failed to do this for over 13 years and over the years they have communicated that it wasn’t easy when they were only able to secure the funding needed for growth from foreign investors.

POTRAZ withheld Telecel’s operating licence back in 2013 until such a time as the shareholding issue was resolved.

Telecel also failed to adhere to a payment plan for the withheld licence. They had agreed with the regulators to pay their US$137.5 million licence fees in instalments from 2013 to 2020.

Back around 2009 when the whole issue began, Telecel had a 28% market share and was the second-largest mobile network operator in the country, behind Econet.

This was down to 4.2% in Q3 2021. Telecel surrendered their market share to Netone which now boasts over 30%.

Telecel says POTRAZ’s ruling is “unwarranted and unfair” and intends to appeal. They believe they will be able to maintain the full range of their services as they challenge the decision.

If Telecel fail in their challenge, that could open doors to new players like MTN who have for long been trying to invade the Zimbabwean market.