Zimbabwe: Govt, Parastatals Owe TelOne $680m in Unpaid Phone Bills
July 4th 2021
Government ministries and parastatals owe TelOne a total $680 million in unpaid telephone bills, severely choking the company’s financial standing.
An update released soon after the government-owned company’s 7th annual general meeting (AGM) revealed the huge debt was affecting the smooth flow of its operations.
“Government continues to top the debtors list owing $575 million while parastatals and state-owned enterprises accounted for $105 million. The government has 22% ($119 million) of its debt outstanding for more than six months, thereby constraining the company’s cash flows and liquidity position,” TelOne said.
To mitigate the problem, the company said it had since engaged its parent ministry – Information Communication Technology, and the Finance Ministry to facilitate the company’s initiatives to ease the debt.
As a result, some ministries have now been migrated to prepaid services.
The huge debt comes shortly after Finance Minister Mthuli Ncube said the government had recorded a whopping $9.8 billion budget surplus in the first quarter of 2021.
TelOne also bemoaned the unresolved legacy debt burden and pleaded with the government to take over the debt.
“The foreign legacy loans expenses amounting to $34.7 billion emanating from the legacy debt of $35.9 billion equivalent to US$ 432 million, continued burdening the company despite persistent efforts for the government to warehouse the debt.
“The warehousing of the legacy loans was meant to restructure the company balance sheet and pave the way for privatisation. However, the formalities of the legacy loan restructuring had not yet been finalised at the end of the year to allow the company to derecognise these loans,” said TelOne.
In April 2019, the government announced plans to warehouse TelOne legacy loans, which were inherited from the Posts and Telecommunications Corporation of Zimbabwe when it was unbundled.
Meanwhile, TelOne’s latest financial results show the company’s net loss before tax stood at $10.3 billion compared to loss before tax of $35 billion in 2019.
This is attributable mainly to the legacy loans expenses amounting to $34.7 billion being partially offset by a monetary gain achieved of $24.7 billion.
“If legacy loan expenses are excluded, the company achieves a profit before tax of $24,4 billion for the year 2020 and $508 million for the year 2019,” it said.
During the period under review, revenue increased by 147% in inflation adjusted terms from $1.9 billion in 2019 to $4.7 billion in 2020 owing to a 14% increase in-broad-band subscribers coupled with a 22% increase in usage.
The upsurge in demand for home broadband services was driven by the Covid-19 induced remote working model (tele-working) adopted by many corporates, accompanied by an increase in online shopping and e-learning.
Read the original article on New Zimbabwe.
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