NetOne confirms talks with strategic partner
Zimbabwe - Corporate - 03-09-2010

NetOne has confirmed that it is in talks with a strategic partner for a possible joint venture that will result in the recapitalisation of the company which has been dogged by financial constraints in recent years. NetOne board chairman Dr Calistus Ndlovu told the parliamentary portfolio committee on Media, Information and Communication Technology the hunt for a partner followed failure by Government, which is the sole shareholder, to inject funds into the company. “After realising that the company cannot operate using the shareholdersquote funds, we have been actively seeking strategic partnerships. “We have had one or two partners expressing interest and now we are left with one,” he said. Dr Ndlovu was, however, not at liberty to disclose details of the partnerships as negotiations were still under way. Reports have, however, linked South African mobile operator MTN to NetOne. Dr Ndlovu said the committee that the board appointed in 2008 was not satisfied with the companyquotes performance. He, however, said the mobile phone operatorquotes lacklustre performance was due to Governmentquotes failure to capitalise the company.

As a result, NetOne, granted the first mobile phone licence in late 1990s, had failed to keep up with its peers Telecel and Econet, which had shareholders injecting funds.
In terms of subscriber base, NetOne is ranked last with close to 500,000, followed by Telecel and Econet at over 3 million. “NetOne has never received any capital infusion from the shareholder,” he said. The committee questioned why the company, which was the first to be granted a mobile phone licence, was a decade later probably the countryquotes smallest mobile telecommunications firm. Dr Ndlovu, however, said it had not been possible for NetOne to behave like an “ordinary company” as it had to follow Governmentquotes development agenda. Meanwhile, NetOne managing director Mr Reward Kangai said the company was aiming to treble its subscriber base by mid-year. He said the company had received funds allowing it to expand its switching centre in Harare, which would allow the company to take on more subscribers. While Mr Kangai was not willing to disclose the source of the funds, the Chinese embassy in Zimbabwe recently said China had provided a grant of over USD 53m to NetOne. It costs about USD 7m to expand the capacity of a switching centre.
The switch is the system that is responsible for routing calls made from one subscriber to the other. “From May onwards, we should be able to release more sim cards. We already have the means to be able to increase our subscriber base substantially,” Mr Kangai said.
NetOne board member and chairperson of the business development committee, Mazwi Dandato, said the company was working to recover the market share it has lost over the years.

Source: Herald