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Zimbabwe’s NetOne under fire for poor performance

By , Journalist
Zimbabwe , 11 Feb 2014

Zimbabwe’s NetOne under fire for poor performance

State-owned Zimbabwe mobile operator NetOne has blamed public procurement requirements for its lack of competitiveness in the country as a tender corruption scandal grips the company.

Parliamentarians in Zimbabwe on Monday said they were concerned about the stunted growth that NetOne is experiencing, despite it being the first to be licensed to offer mobile phone services in the country.

NetOne, with about 2.5 million subscribers, is dwarfed by Econet Wireless, whose subscriber base has touched 8.5 million.

Telecel Zimbabwe, the third telco in Zimbabwe, has also overtaken NetOne. Telecel has over 2.5 million subscribers.

As a result, Zimbabwean parliamentarians on Monday queried NetOne managing director, Reward Kangai, on why his company is lagging behind.

Kangai blamed statutory obligations on procurement procedures for holding back the firm.

“We are now required to publish key strategic plans to the State Procurement Board (SPB) when our competitors have free rein and have access to that information. They know that NetOne is trying to do this and they can take these documents from SPB before we even implement (strategies),” Kangai told the parliamentarians.

Kangai has made this comment amid a tender controversy involving NetOne, the SPB and Chinese telecoms equipment maker Huawei.

Zimbabwean-born Tafadzwa Muguti, who is a Johannesburg-based businessman, has taken NetOne, the SPB and Huawei to court in Harare amid allegations of an irregularly awarded multi-million dollar network upgrade deal.

Muguti alleges that NetOne ignored submitting a public tender bid for a network upgrade; thus, allegedly circumventing Zimbabwean procurement law.

However, Nelson Chamisa, Zimbabwe’s former technology minister, has told ITWeb Africa that procurement procedures, such as putting out public tenders, is handicapping the growth of NetOne.

“We have to deal with procurement procedures that are handicapping the business model for parastatals in ICT such as NetOne,” Chamisa said.

Chamisa added that NetOne is facing deep rooted viability problems, with the company requiring an urgent “capital injection” and further “investment into the business”.

He also said that there are corporate governance issues that needed to be addressed amid an explosion of salary perks for state parastatal executives in Zimbabwe.

“Raising capital for the company can never be easy. It’s more difficult in the context of the challenges the company is facing as well as the policy thrust,” Chamisa said.

However, Kangai told Zimbabwean parliamentarians that the government, which is the major shareholder in NetOne, is weighing its options around a potential investment pact for the telco.

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