President Robert Mugabe has given the nod for Telecel Zimbabwe's licence to be revoked, with a cabinet committee now set up to cancel its licence.

Telecel Zimbabwe is the country’s second largest telecoms operator with just below 2.5 million subscribers. It offers other services such as mobile money and mobile insurance.

The government’s decision to cut the firm's licence is not an easy one to execute, sources in Zimbabwe say. Due consideration has to be given to subscribers and employees of the telcos’ its operating licence is to be revoked, they said.

"It's a decision we hear has been taken but this is not the end of this.

"What do you do with the subscribers and the employees; it will boil down to encouraging the foreign shareholder to pay for the licence and for it to be fully compliant with empowerment laws," said a Zimbabwean official with knowledge of developments on the issue.

Supa Mandiwanzira, Zimbabwe’s ICT minister said on Wednesday that the Zimbabwean cabinet had taken the decision to cancel Telecel Zimbabwe's licence.

He said the decision had been taken after it was resolved that Telecel had breached licence renewal payment and indigenisation requirements.

Zimbabwe’s indigenisation process requires that foreign companies be majority controlled by locals.

The licence renewal fees are pegged at $137 million for a 20 year old tenure and Telecel Zimbabwe has reportedly only paid a portion of this and has reneged on settling the fee in full.

"That Telecel Zimbabwe must cease operations because they don't have a licence is a decision that has already been adopted by cabinet. There is a cabinet committee in place to execute the decision by cabinet," said Mandiwanzira.