Zim's TelOne invests $2.4 million into broadband network upgrade
TelOne, a Zimbabwean telecoms company, committed $2.4 million in the most recent upgrade of its broadband network, allowing it to increase capacity and reduce connectivity latency.
This is despite the fact that legacy loans and network vandalism affecting 30 000 subscribers continue to be big drain on profitability.
TelOne operates landline phone, VoIP, and data centre operations in addition to offering internet services.
TelOne alerted users in early October that its data network had been upgraded.
Lawrence Nkala, the company's recently appointed CEO, said in an interview with ITWeb Africa that the company recently invested millions in broadband network expansion.
"Around $2.4 million was invested in the project. In the last two years, TelOne has invested at least US$20 million in the network," Nkala said.
The most recent network upgrade concentrated on streamlining traffic management and routing processes, he noted.
The improvement addressed the fibre and ADSL categories.
The government-owned telco is currently focusing on developing its metro network, however cash shortages are likely to stymie this.
This metro capacity increase is being implemented to improve TelOne's ability to handle more enterprise and residential data users.
TelOne and other Zimbabwean ISPs may face competition from Starlink, which says on its website that it would begin operations next year, subject to regulatory permits.
The telecom provider currently has over 250 000 data clients on its network. It also gives bulk internet access to other Internet Service Providers and mobile networks. However, the Zimbabwe Auditor General’s office this month flagged TelOne for widening its loss to about US$7.4 million in 2022.
Despite the expenditures it is making in its data network, TelOne is facing "material uncertainty that may cast significant doubt on the company's ability to continue as a going concern," according to the Auditor General's report.
TelOne's balance sheet includes approximately US$393.8 million in overdue legacy loans.
Vandalism and theft of property equipment add to the company's woes. According to Nkala, TelOne has recorded 250 instances of vandalism on its network equipment in 2023 alone.
This will result in "affecting more than 30 000 customers in 2023" and resulted in an estimated loss of more than US$40 000 in restoration costs and US$250 000 in revenue" resulting from losses.
TelOne says it is diversifying into other revenue-generating streams as the company's voice division faces disruption from developing and cheaper technologies such as internet-enabled instant messaging and social networking sites that now permit audio and video calls.
Cloud and data centre solutions, as well as VoIP, are among them.
Nkala stated that the company had long predicted that voice would fall, so it moved into other services, which currently account for more than 70% of its revenue creation.
To increase its attractiveness to international investors, Zimbabwe's government has just placed TelOne under its sovereign wealth fund, Mutapa Investment Fund.
The Mutapa Investment Fund is Zimbabwe's equivalent of a Sovereign Wealth Fund (SWF). It, like other SWFs, is a state-owned investment fund that invests in a range of assets.