The Sunday Mail
Africa Moyo
FIXED telephone operator TelOne is engaging the Ministry of Finance and Economic Development to ensure consistency in the payment of Government and other parastatals’ telephone bills as part of a “set-off arrangement” that is meant to reduce high debt levels that are adversely impacting on the company’s operations.
The company is currently owed a total $190 million by individuals, companies and Government departments.
Government departments alone owe TelOne almost $46 million, resulting in a set-off arrangement being put in place last year to reduce the debt levels.
However, there has not been consistency in repaying the bills.
TelOne corporate communications manager, Mrs Melody Harry told The Sunday Mail Business last week that while the “set-off arrangements” on Government and some parastatals’ telephone bills has been helpful, the deal needs “smoothening” to ensure sustainability.
“This is an arrangement that has been in place since last year and TelOne is further engaging to ensure the smoothening and consistency of the process. This engagement was further stressed to the Minister of Finance Honourable Chinamasa at the TelOne AGM recently.
“The set-off arrangement has helped TelOne to recover some of the money owed by Government and other departments; thus reducing amounts owed. With the smoothening of the set-off arrangement through the Ministry of Finance, we expect the debt to be reduced reasonably,” said Mrs Harry.
TelOne has employed a number of initiatives, including third-party debt collectors, to recover legacy debts.
An average of $1million is being collected monthly through the strategies.
“This, unfortunately, does not have much impact on the balance sheet, which is heavily weighed down by the legacy debt. This is the reason why the company is pursuing Government debt warehousing,” explained Mrs Harry.
Like many parastatals, TelOne is choking under a $345 million legacy debt which dates back to the Postal and Telecommunications Corporation (PTC) era.
Other parastatals stewing in debt are the National Railways of Zimbabwe ($144 million), Hwange Colliery Company Limited ($161 million) and Air Zimbabwe ($300 million).
But unlike its peers, TelOne’s operations are turning the corner despite the massive legacy debts as evidenced by a return to profitability in the half year to June 30, 2015.
The company posted a net profit of $480 000 from a loss position of $7,8 million in the prior year.
Meanwhile, TelOne has begun implementing the first phase of the prepaid billing platform, with areas such as Ruwa, Mazowe, Plumtree, Karoi, Kariba, Marondera and Chikanga in Mutare already on pre-paid voice and broadband.
The full-scale implementation will be part of the $98 million project to be funded under the China Exim Bank facility.
Mrs Harry said the pre-paid billing system was part of measures to stem debts and to allow customers to manage their spending on voice calls and broadband.
“TelOne has developed innovative packages, which are already exciting the market.
“This (prepaid billing system) will bring a win-win situation where our clients will be able to manage their spend while the company’s revenues will be collectable. It is therefore exciting for both the company and the clients,” said Mrs Harry.
On current billings, the company is able to collect an average of 85 percent.
The introduction of the pre-paid system is forecasted to improve TelOne’s revenue collections going forward.
