The Zimbabwean government has reportedly warned Egypt’s Orascom Telecom that it will not renew the licence of its local unit Telecel, unless local shareholders re-acquire a majority stake.
The minister for Transport, Communications and…
The Zimbabwean government has reportedly warned Egypt’s Orascom Telecom that it will not renew the licence of its local unit Telecel, unless local shareholders re-acquire a majority stake.
The minister for Transport, Communications and Infrastructural Development, Nicholas Goche, told state-owned newspaper The Herald that Telecel’s foreign ownership puts it in breach of licencing requirements.
Orascom Telecom owns 60% of Telecel, Zimbabwe’s second-largest mobile operator, via its subsidiary Telecel Globe. The Empowerment Corporation, a local group, owns the remaining 40%.
According to the newspaper, Telecel should have sold a 20% stake back to local shareholders within five years of receiving a licence, acquired in 1998.
The minister was quoted as saying that the pressure is on Telecel Globe to address the issue and that, if they fail to do so, their licence will not be renewed. Telecel’s 15-year licence is set to expire next month.
Furthermore, Telecel is also reportedly in breach of the Indigenisation and Economic Empowerment Act, often considered as controversial. The Herald explains that the Act requires that previously marginalised black Zimbabweans should hold at least 51% in any locally registered firm.
According to a Reuters report, the Zimbabwean government has said it has renewed the licence of the nation’s largest mobile operator, Econet Wireless, which is listed on the Zimbabwean Stock Exchange.
Orascom Telecom, a subsidiary of Russia-focussed VimpelCom, and Telecel were not immediately available for comment.