The worst could be over for Telecel Zimbabwe, at least for now, with the VimpelCom owned-telco holding talks with the government to address its licence renewal and indigenisation compliance obligations.

Zimbabwe ICT minister, Supa Mandiwanzira said last month that President Robert Mugabe's cabinet had approved cancellation of Telecel Zimbabwe's licence over the company's failure to pay the $137 million licence renewal fee.

He also said Telecel Zimbabwe, which has been at the center of a shareholder fight for the control of minority shares held by the Empowerment Corporation, had failed to bring its shareholding structure in line with the country's empowerment laws.

Zimbabwe's indigenisation policy, which was first promulgated in 2007, seeks to compel all foreign owned companies to cede 51% control to local citizens.

Now it has emerged that the state telecom regulator, Potraz, is holding talks with Telecel Zimbabwe over modalities under which it will eventually pay its licence fee obligations. Econet Wireless has reportedly previously complained that it is the only telco that has paid the full licence renewal fee.

Baxton Sirewu, acting director general for the Posts and Telecommunications Regulatory Authority (Potraz), told journalists on Tuesday that the regulator was engaging with the telco to address its licence obligations. Telecel is Zimbabwe's second largest telco, with around 2.5 million subscribers.

"We have been engaging quite closely with Telecel and exchanging information. There are a number of compliance issues regarding the issue of Telecel," Sirewu said at the Innovation Africa Digital Summit in Victoria Falls Tuesday afternoon.

He explained that Telecel Zimbabwe had written to the regulator in response to regulatory compliance issues raised by the government. Potraz was now "considering those" and would update the market and stakeholders on the outcome of deliberations.

Telecom industry sources told ITWeb Africa that Telecel Zimbabwe was seeking an extension of time to enable it to sort out its shareholder issues, which would pave the way for the full payment of the licence renewal fee.

Telecel Zimbabwe has told its subscribers in the past few months that it is working on regularising its operations in the southern African country.