The Zimbabwean government has completed its US$40m acquisition of VimpelCom’s 60% stake in Telecel Zimbabwe, according to ICT minister Supa Mandiwanzira. Mandiwanzira told a parliament committee that the government had closed the deal via state-owned ISP Zimbabwe Academic and Research Network (Zarnet), local media reported.
The Zimbabwean government has completed its US$40m acquisition of VimpelCom’s (NASDAQ:VIP) 60% stake in Telecel Zimbabwe, according to ICT minister Supa Mandiwanzira.
Mandiwanzira told a parliament committee that the government had closed the deal via state-owned ISP Zimbabwe Academic and Research Network (Zarnet), local media reported.
Russia-focused VimpelCom, reportedly advised by CBZ, agreed last November to sell its stake in Telecel, which had been the subject of a drawn-out battle with the government. The telco, the smallest of the country’s three mobile network operators, was accused of not paying its license fees or adhering to a 49% foreign ownership cap and had its license revoked earlier in the year – a move VimpelCom successfully appealed in court.
The Amsterdam-based telco owns 51.9% of Global Telecom Holding (GTH), which agreed to sell its stake in Telecel International, which in turn owned 60% of Telecel Zimbabwe. The remainder of Telecel Zimbabwe is held by local investor group the Empowerment Corporation (EC).
Mandiwanzira said the government wanted to ensure the asset was localized rather than sold internationally, The Herald reported.
“We are proud of this because we bring back to our shores an investment that has been traded on the international market without any benefit to Zimbabwe,” he was cited as saying.
He noted that Telecel will cut costs by localizing management fees rather than paying them to VimpelCom, and that the government will “most likely” receive the outstanding license fees. The state will also be able to generate tax revenues from the operator, he said.
Mandiwanzira was cited in other local reports saying that the government had raised $40m from the state-run pension fund National Social Security Authority (NSSA). EC has also approached NSSA to buy their shares, he added.
Econet Wireless is Zimbabwe’s largest mobile operator with 6.7 million active subscribers as of the end of 2015, according to telecoms regulator Potraz. NetOne is the second largest player with 4.1 million active subscribers, while Telecel trails with 1.9 million.
“An annual review shows that NetOne has been steadily gaining market share over the past year, whereas Econet and Telecel`s market shares have been steadily declining,” Potraz said in a report on operators’ performance last year.
The ICT ministry was not immediately available for comment.