The Communication and Allied Service Workers Union of Zimbabwe has applied to the country’s High Court to place Telecel officially under corporate rescue as concern over possible liquidation of the company intensifies.

The company, controlled by the government under a shareholding structure that also includes minority private investors, is struggling. According to data from the Posts and Telecommunications Regulatory Authority (Potraz) the operator lost 5% of its subscribers during the first quarter of 2022.

Data also shows that Telecel has 0.9% share of the voice telephony market, which is dominated by rival operators Econet and state-controlled NetOne.

The labour union has applied to have Telecel Zimbabwe be declared insolvent and placed under corporate rescue and said failing this, the company could go into liquidation.

In the Union’s application filed at the Harare High Court, Secretary General David Mhambare stated: “The (worsening performance) indicates the existence of a material uncertainty that may cast significant doubt on the company’s (Telecel) ability to continue operating as a going concern.”

He said liabilities are outstripping assets and has placed the company into a negative net equity position and corporate rescue was the only way to rehabilitate it.

Since 2021, Telecel Zimbabwe’s operations have been impacted by network outages, rising rates of dropped calls and poor reliability.

The company accounted for only about 2.6% of overall mobile industry revenues in 2021, according to Union’s application.

It added that Telecel has not been able to “invest in adequate resources towards 4G network compared to its competitors and this places it as a competitive disadvantage” against the backdrop of fast developments in the mobile industry.

Telecel had not responded to requests for comment at the time of publishing.