Read time: 3 minutes

Telecel Zimbabwe ‘rescued’ by Mugabe nephew

By , Editor, ITWeb Africa
Zimbabwe , 19 Aug 2013

Telecel Zimbabwe ‘rescued’ by Mugabe nephew

A nephew of Zimbabwean President Robert Mugabe is part of an empowerment deal that has helped mobile operator Telecel renew its controversial operating licence.

This is according to a report from South Africa’s Mail & Guardian newspaper, which says Mugabe’s nephew Patrick Zhuwao has been ‘roped in’ as part of a deal to save the telecoms firm from having its licence revoked.

In June, Telecel’s operating licence expired but was not renewed because the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) said that the operator had not complied with Zimbabwe’s indigenisation policy.

The policy requires that all foreign firms in Zimbabwe give up the majority of their ownership to black Zimbabweans.

Telecel Zimbabwe, which says it has over two million subscribers and is Zimbabwe's second largest mobile operator, is majority owned by Telecel International, which is a unit of Russian telco Vimpelcom.

The non-renewal of Telecel’s licence at the time subsequently led to Zimbabwe’s largest mobile operator Econet temporarily disconnecting from Telecel’s network.

But earlier this month, Telecel Zimbabwe told Potraz it plans to comply with the country’s indigenisation policy. Following talks between the telco and the regulator, Potraz then granted Telecel a renewed licence at a reported cost of $137.5 million .

And it has since emerged that Zhuwao could have played a key role in the operator regaining its licence.

The Mail & Guardian has reported that sources within the telecoms industry have said that Telecel Zimbabwe’s chair, James Makamba -- who is exiled in South Africa after fleeing Zimbabwe amid charges of foreign currency externalisation -- had called on Zhuwao to step in and help save the telco.

According to the report, Zhuwao was on July 1 appointed managing director of a firm called ‘Empowerment Corporation’, which is a 40% shareholder in Telecel Zimbabwe. In turn, Makamba is reported to be the major shareholder of Empowerment Corporation.

But the newspaper reports that Zhuwao’s influence has declined in Zanu-PF and that government had even refused a deal in which he was to emerge as the single largest empowerment partner in Telecel Zimbabwe.

Nevertheless, this did not prevent government from renewing the telecom firm’s operating licence.

In an interview last week, Zhuwao also reportedly spoke of his role in securing the renewed licence, saying his relationship with Mugabe did not play a major part in the deal.

“This was not because of an accident of birth, it was because of my experience. I was instrumental in putting together the technical component of Telecel [Zimbabwe] when it was formed, so I know the business,” Zhuwao said.

Read more
Daily newsletter