Zimbabwe is staring at the prospect of an internet blackout in the near future as foreign service providers are increasingly getting disillusioned by TelOne’s continued failure to pay $22 million owed for services offered.
So dire is the situation that a Mauritius-based financier, Telecom Capital Finance, is threatening to seize TelOne’s shares in the West Indian Ocean Cable Company (WIOCC) over a $1,1 million debt.
WIOCC is a company that provides capacity to international and African telecommunications companies, over-the-top (OTT) services, content providers and internet service providers in and outside Africa.
Critically, TelOne is sitting on four letters of demand from Telecomicacoes de Mozambique (TDM), Duraline, WIOCC, and Telecom Capital.
Overall, TelOne owes 22 companies from Africa, Asia and Europe a combined $22 million.
Mrs Chipo Mtasa, the TelOne MD, launched a passionate appeal to members of the Parliamentary Portfolio Committee on ICT after their tour of the Mazowe Earth Satellite Station on Tuesday, to help the company settle the obligations.
“TelOne is in receipt of demand letters from the following service providers; TDM of Mozambique — $5,7 million for backhaul services, Telecom Capital Finance — $1,1 million for loan repayment, Duraline — $845 000 for network material, WIOCC — $6,2 million for internet bandwidth,” said Mrs Mtasa.
“TelOne continues to be crippled by the escalating arrears on a monthly basis with no meaningful allocations received since July 2018.
Consequently, foreign payment arrears have accumulated to $22 million for services and other obligations.
“We continue to plead for the telecommunications sector to be prioritised for foreign currency allocations and this needs your urgent intervention as the situation is now out of control.”
Mrs Mtasa said TelOne is facing “threats of service disruption and foreign litigation”, which will be difficult to manage if they were implemented.
“Withdrawal of services will result in a standstill of our operations and a major internet blackout for the country.
“As reiterated in our past correspondences, Telecom Capital Finance secured a default judgment against TelOne in Mauritius.
“The continued delayed remittances will result in seizure of TelOne shares in WIOCC any moment from now (while) Telecom Capital will be reinstating $1,6 million that was written off when refinancing was negotiated in 2014, if TelOne fails to pay the balance of US$1,1 million by December 20, 2018 (today),” said Mrs Mtasa.
TelOne’s request for a bailout comes at a time when the 2019 Budget indicated that Government would not be dolling out money to stressed firms, unless they were involved in critical business.
Foreign currency shortages, which have resulted in shortages of fuel, bread and other basics, have also seen TelOne losing $7,2 million in revenue as at October 31, 2018 due to failure to fulfil customer requirements.
Mrs Mtasa said further revenues losses may amount to $20 million due to loss of customer reputation as a reliable service provider.
Currently, TelOne requires $3 million to pay for drop cable, drop wire, modems, fibres, routers, media converters and others.