The Sunday Mail
The Managing Director of TeONe Mrs Chipo Mtasa addresses a gathering during the signing of a memorandum of understanding on developing ICT in Zimbabwe at a local hotel on Tuesday in Bulawayo
TELONE is probably the most talked about parastatal in the market of late. Its innovative products have captured the imagination of the ICT industry. But there has been problems in terms of fixed telephony: As the mobile phone market continues to expand, the fixed telephone business has been shrinking. Local mobile subscribers had risen to 11,8 million by the end of last year from 11,4 million in the same period a year ago. This naturally affects TelOne’s business. However, the parastatal has been spreading its business portfolio with aggressive investment into the broadband network service. Our Business Reporter, Enacy Mapakame, caught up with TelOne MD Mrs Chipo Mtasa, at the Zimbabwe International Trade Fair (ZITF) in Bulawayo to get an insight into the plans of telecommunications company.
Q: A recent report by Potraz (Postal Telecommunications Regulatory Authority of Zimbabwe) shows that the fixed telephone business is declining. How does TelOne intend to reverse the trend?
A: I am not sure if this is a reversible trend, but as TelOne our focus is not on fixed lines only, but we want to offer diversity in communication that our clients are looking for in terms of other means of communication. The decline has not been very significant as our revenue remains in favour of fixed voice.
Q: So can you say fixed voice is still your cash cow? What is the future of landlines in an economy where the market is shifting towards mobile phones?
A: Yes, it is and remains relevant in the current set-up. Most businesses and Government departments still use fixed telephones because they are a reliable mode of communication. The declines in the minutes are also reflective of the current challenging economic environment. But as the economy recovers, we think there is going to be an upturn too.
The fixed telephone network will always be here because it gives value for money with the cheapest tariffs — which is USc7 — compared to mobile operators’ charge of USc15. It offers very clear and reliable sound. Mobile phones may offer the convenience especially in areas where we did not have infrastructure, especially in new areas that mushroomed in the past decade.
Q: TelOne’s investment in the ICT sector has been growing over the years, how much are you targeting to invest this year?
A: From our own revenues, we are targeting US$10 million. But we have a major infrastructure modernisation project which is expected to cost US$98 million and is currently under consideration. The project entails modernising our core network and centralising all technology to operate from one platform and extend our backbone fibre reach in the South Eastern region of the country and introducing access to areas without network. If we manage to raise funds for this project, it will be completed in only 12 months. It involves modernising voice and broadband services.
Q: Considering the current liquidity constraints affecting the businesses and individuals, how much have you managed to collect from debtors to date?
A: This has been a real problem and difficult issue, but we have managed to collect US$50 million in the four months to April. We do have a high debtors’ book and we are still owed US$100 million. A lot of the debtors are struggling because of cash constraints affecting businesses and individuals. Individuals owe us US$40 million, Government US$40 million and corporates US$20 million. There have been misconceptions on the billing system, that we inflated the bills when converting to US dollars. We have done a lot of educational campaigns to explain and prove that there were no inflated bills converted from the Zimbabwe dollar era to US dollar era. Of current billings, we target to collect 90 percent of current debt. But sometimes it does not work on particular months with reluctance to pay up exhibited by our clients.
Q: So what guarantee do you have of ever recovering all the money and avoid a repeat of the same situation where bills were ballooning?
A: The infrastructure modernisation project will also introduce pre-paid billing system. It will be easier for clients to use unlike paying for a service they would have already used. We will convert the already existing billing system into pre-paid system, but it should be configured in a way that relates to the technology that would have been brought in.
The old technology does not allow us to immediately convert into prepaid system except for broadband. Right now we are talking to Chinese banks for funding with assistance from Government and they are forthcoming. They are assessing our progress and we expect to have an indication on progress of the negotiations before end of third quarter.
Q: What is your plan for TelOne in the next five years?
A: We set ourselves a transformation strategy anchored on these pillars: revenue growth and profitability, technology and processes, human resources development and organisational culture, corporate governance, adherence and partnerships as well as market growth. Our vision is to provide connectivity everywhere to everyone in Zimbabwe.
Q: Can you give us an update on the fibre project? How has been the response to your new ICT package recently launched?
A: The project has covered major cities — Harare, Bulawayo, Mutare, Masvingo, Gweru, Mutare and Kariba. We are also in Ngezi, Zvishavane and Mimosa. Businesses and corporates in CBD are connected and we are moving into smaller towns too. When we started, we were under-estimated, but now the market can feel our presence. It’s a small step but we are growing. Response for our new products has been positive especially with the public WIFI, which is cheaper than other packages. That really shows the potential TelOne has to impact on network coverage across the country.
Q: You left a more lucrative industry at RTG to join a seemingly sinking ship at TelOne. How has been the journey so far and how have you managed to bring TelOne back on its feet? How have you managed to turnaround the company to where it is now?
A: It has been an interesting journey, the support we received from all stakeholders has been tremendous. It has been a great learning experience too. There is tremendous goodwill especially to businesses that have been here for long but known to be struggling. There has been goodwill from the market and business and I believe this will carry us far. We are also driven by one thing, which is to honour the needs of our market. It is not a single effort, the board itself has been strong guided by shareholders and a committed workforce. There is acknowledgement at TelOne for the need for change. We also take what clients say seriously and we do not shun criticism. I know there is still a lot of outcry out there in the market, but because of the support and teamwork we have, it encourages us to confront those issues head-on as a team.
Q: What is your general assessment of the ICT sector?
A: The sector is very competitive. It is no longer a preserve of giants, but now everybody even small players, a start-up business or one man band can participate in the sector. There is a lot of diversity and opportunity in the area. It is a dynamic revolution we should all embrace
But being a fast-paced sector, it may be frightening for companies to keep up with that pace.
