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Zimbabwe: Gvt may cancel Telecel's licence, oust its chairman
Business Day (SA)
Extracted from Balancing Act's News Update 285
December 11, 2005

http://www.balancingact-africa.com/news/en/issue-no-285/telecoms/zimbabwe-govt-may-ca/en

After withdrawing a licence for the country’s second fixed telephone network, TeleAccess, the Zimbabwean government has turned the spotlight on third cellular operator Telecel Zimbabwe.

The state is mulling a plan that involves either cancelling the operator’s licence or changing the ownership structure of the company, and possibly ousting its non-executive chairman, James Makamba. The move to withdraw Telecel’s licence could further disrupt Zimbabwe’s struggling telecommunications sector.

Zimbabwe’s state-run fixed line company, TelOne, has been cut off by SA’s Telkom over an unpaid debt. Zimbabweans are now forced to call SA via Canada on an internet-based system. TelOne is said to be technically insolvent because of huge debts to foreign creditors.

Sources said last week that the authorities were determined to oust prominent businessman Makamba from Telecel. Makamba is facing allegations of breaching the Foreign Exchange Control Act by allegedly trading on the black market. Government is currently taking steps against Telecel over the Makamba issue. A letter to Telecel has been drafted and warns the company’s licence will be withdrawn unless it changes its shareholding structure and removes Makamba, an official source said.

Action against Telecel could be taken anytime now. The Telecel issue had been the subject of cabinet debates since August. Makamba is a major shareholder in Telecel, which is 60% held by Telecel International and

40% held by the Empowerment Corporation of Zimbabwe, a local business consortium dominated by Makamba.

Telecel International is in turn fully owned by Orascom Telecom, an Egyptian conglomerate listed on the Cairo and London stock exchanges.

Makamba, who has already lost his farms and other properties due to seizures by state agents, failed to appear before the court on August 31 after fleeing the country in July. He has been to SA several times. Efforts to contact him before close of business on Friday failed.

It will come as no surprise that President Robert Mugabe’s nephew, Leo Mugabe, a shareholder in Telecel, is said to be seeking more equity in the company.

Transport Minister Chris Mushowe and the Post and Telecommunications Regulatory Authority of Zimbabwe officials have been to Egypt in a bid to persuade Orascom to kick out Makamba.

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