Mozambique: Telecom Minister calls for immediate action to save TMCEL from bankruptcy
May 14th 2023
Tmcel was born in 2019 from the merger of the companies Telecomunicações de Moçambique (TdM) and Mozambique Cellular (Mcel). The company’s activities are weighed down by financial difficulties, some of which were inherited from TdM and Mcel.
Mozambique’s public telecommunications company Tmcel is on the verge of bankruptcy, according to Mateus Magala (pictured), Minister of Transport and Communications. On Wednesday, May 10, during the government’s response session to questions from members of parliament, he said that it was necessary to implement immediate and urgent measures to save the company.
According to the minister, possible measures include the sale of more than 80% of Tmcel’s assets, downsizing and the assumption of debt by the state. This should help attract a strategic partner to help turn around the business.
Remember that Tmcel is in a delicate position. Born in January 2019 from the merger of Telecomunicações de Moçambique and Mozambique Cellular, the company is facing cash flow problems caused in particular by the loss of weight in the mobile telephony market. Between 2017 and 2021, it saw its mobile subscriber base drop by 69% to around 2 million, according to data from the Mozambique Communications Regulatory Authority (INCM).
In addition, Tmcel has accumulated arrears in salary payments and a mounting debt of more than $400 million. A report published in 2022 by the Center for Public Integrity (CIP) indicates that the company had ended the year 2021 in technical bankruptcy. At the beginning of April, the government had to entrust the management of the company to the Institute for the Management of State Funds (IGEPE), pending the establishment of a management commission responsible for its restructuring.
The initiatives implemented by the government are particularly aimed at making Tmcel a profitable business again. This involves the settlement of debt and the payment of salary arrears due to employees. The company will also be able to raise the funds needed to improve the coverage of its mobile network and the quality of services. This should allow him to start winning new subscribers, guaranteeing more income.
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