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Telecel licence revoked
Shakeman Mugari, The Independent (Zimbabwe)
August 10, 2007

http://www.theindependent.co.zw/viewinfo.cfm?linkid=11&id=11180

THE Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has cancelled Telecel's operating licence after it failed to rectify its shareholding structure.

Potraz said Telecel had violated telecommunications regulations which stipulate that locals must have a majority stake in mobile telephone companies.

The majority stake of 60% in Telecel Zimbabwe (Pvt) Ltd is currently owned by Telecel International while the remaining 40% is owned by Empowerment Corporation (EC), a company owned by local groups.

The licence was awarded to EC in 1997 as part of government's indigenisation efforts.

In a statement released yesterday, Potraz said: "Telecel Zimbabwe (Pvt) Ltd was allowed to operate with a foreign majority shareholding on condition that the ownership structure would be regularised within a period of five years from the commercial date of the licence.

"Telecel Zimbabwe (Pvt) Ltd has now been operating for more than eight years with a foreign majority shareholding and has failed to regularise its shareholding structure within the period allowed. The company therefore stands in breach of both the licence conditions as well as provisions of Section 36 of the Act.

"Potraz would like to bring to the attention of the public that the licence number NCT20020602 issued to Telecel Zimbabwe (Pvt) Ltd was cancelled in terms of Section 43 of the Postal and Telecommunications Act (Chapter 12:05) on the 9th August 2007 and that Telecel Zimbabwe (Pvt) Ltd has been dully informed in writing of this cancellation."

Potraz had given Telecel until June 30 to rectify its shareholding structure according to the regulations.

EC had the preemptive rights to buy 11% from Telecel International to restructure the shareholding in line with the law. EC however failed to raise the foreign currency required to buy the stake resulting in the cancellation. Telecel's lawyer, Jonathan Samkange, a partner at Byron & Venturas, told the Zimbabwe Independent that the company had prepared an urgent appeal against the cancellation and was looking for a judge to hear the matter.

Telecel has been dogged by infighting for the past two years with Leo Mugabe insisting that he be given a stake in EC. Other EC members have however resisted his demands saying Mugabe was never a member of EC because his cheque for the joining fee was returned by the bank.

In April last year Mugabe wrote to the Telecel demanding that he be given a contract to provide technical services to the company. He said he was entitled to 1% of the company's total revenue.

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