The company blamed the problems on “rapid depreciation of the local currency” which has “affected the ability to meet the foreign currency-denominated obligations, especially spares for equipment and service level agreements and support”.
The statement comes just days after the secretary general of the country’s telecoms workers’ union said revenues had fallen to Z$7 million a month – a fraction of the Z$90 million a month coming into NetOne, also state-controlled.
Annual inflation in Zimbabwe reached 521% in December 2019, up from 480% in November. This is way below the rate for November 2008, when Zimbabwe had hyperinflation of 79.6 billion per cent a year.
David Mhambare, of the Zimbabwe Communications and Related Service Workers Union, said: “Active subscribers went from 2.2 million in 2014 to around 800,000 in December 2019. The network availability standard has dropped from 99.99% to just 40% and SIM cards cannot be replaced because the mobile network systems are down.”
Network coverage has dropped to 65%, said Mhambare in his statement. According to LinkedIn, he is a senior internal auditor at Telecel, having joined the company 10 years ago.
He said workers were “concerned about the viability of the business. The company is now technically insolvent and does not pay creditors, in fact debts now far exceed assets.”
Telecel, which used to be owned by VimpelCom, now Veon, denied the suggestion, saying it has was substituting for imports and building local skills.
However a company official complained about power cuts, which required it to increase the consumption of diesel.
Local media say Telecel is in “advanced discussions” with the Ministry of Energy about direct electricity links.
