Chinese giant resumes US$12m talks with NetOne

CHINESE technology conglomerate, ZTE Corporation has confirmed that it has resumed discussions with local telecommunication firm, NetOne, for the supply of equipment, despite the state-owned entity not having a fully functioning board or management team, businessdigest revealed.

In 2017, ZTE entered into an agreement with NetOne worth US$12 million for the supply of a mobile switching centre, a converged billing system, refurbishment of the data centre, power system and the power backup system, as well as convergent messaging architecture.

A deposit was paid to ZTE upon the delivery of the equipment and the completion of the refurbishment of the data centre.

However, businessdigest understands NetOne abandoned the deal after reintroduction of the Zimbabwean dollar in June last year, which resulted in the local unit depreciating.

“At no point was ZTE informed that NetOne does not have a board in place and neither was it informed that there is no management in place to handle the affairs of NetOne.

In any case, ZTE as a supplier and strategic partner is not mandated to interfere with any operational and internal affairs of their clients,” ZTE Zimbabwe representative, Jorrum Chinamasa told businessdigest in an emailed response.

“As a business we focus on the core business relationship between the two parties and adherence to the terms and conditions stipulated within the contract. As far as ZTE are concerned the issue of the contract remains open and will be pursued to its logical conclusion just like any other business deal.”

He said ZTE commenced the deployment of the project in 2018.

“As a professional entity, we are not at liberty to divulge the finer details contained within our contract with NetOne, as that is privileged information which should be treated as confidential to the parties involved,” Chinamasa said.


According to NetOne sources privy to the ZTE deal, at the time of termination, nearly US$2 million dollars had been paid to ZTE by the local telecommunication firm towards the deal.

The reason why the deal was terminated was because the depreciation of the local unit against the United States dollar, after the local currency’s reintroduction, increased the cost of the deal for NetOne.

As a result, NetOne would have paid the balance of US$10 million at the prevailing rate to ZTE, a rate which was changing daily, making it hard for NetOne to meet its end of the bargain.

The deal comes at a time when NetOne is operating with a three member board, namely, acting board chair Susan Mutangadura and two other board members Winston Makamure and Mathias Rangarirai Mavhunga.

The other board members, board chairperson James Mutizwa, audit committee chairperson Sibonile Dhliwayo and human resources committee chairperson Keumetsi Mpandawana, resigned over alleged unprofessional conduct in February.

Later, another board member Paradzai Chakona was sacked while Douglas Mamvura was suspended by the Mutangadura led board.

Further, the Mutangadura led board is currently at logger heads with NetOne CEO Lazarus Muchenje, who the former has been trying to fire.

However, the matter was taken to court and disputed leading to Muchenje’s recent reinstatement. But, it was recently revealed upon his return to work the Mutangadura led board is now using the Covid-19 pandemic to keep him from coming to work.

The Mutangadura led board has not only been fighting Muchenje but other senior managers as well, whom they took to court on allegations of impropriety effectively leaving NetOne without senior management.

These senior managers include interconnection and roaming manager Tawanda Sibanda, acting chief finance officer Tinashe Severa, chief technology officer Darlington Gutu, chief operating officer Spencer Manguwa, and acting head of legal services Tanyaradzwa Chingombe.

“The national balance sheet cannot afford debts like that, the US$10 million balance, I think that is irresponsible as paying the balance would fall on the state,” the NetOne source said.

Mutangadura had not responded to questions sent to her at the time of going to print on the NetOne board resuscitating the deal with ZTE. Businessdigest also queried why this was being done when they did not have a full board and management.

Source – the independent

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