/ 1 January 2002

Foreign investors eye Zim telecoms stake

Zimbabwe said on Friday four foreign-led groups had expressed interest in a stake in state-owned fixed and mobile phone services, despite a deepening crisis which has seen investors flee the troubled country.

The cash-strapped government plans to sell 30% of the Post and Telecommunications Corporation (PTC). Some industry players value the stake at up to 20-billion Zimbabwe dollars, which is equal to about $360-million at the official rate and around $33-million at the black market exchange rate.

PTC is the only provider of the country’s fixed-line phone service through its Tel*One business. It also owns mobile phone group Net*One, which competes with two other mobile phone companies — Econet and Telecel.

”We have received expressions of interest from four companies. We are now going to open our data room to them so that they can access information for their bids,” Privatisation Agency of Zimbabwe official Jealous Chirove said.

The interest in Zimbabwe telecoms comes at a time when the former British colony is engulfed in its worst economic crisis, largely precipitated by the government’s controversial seizure of white-owned farms for redistribution to landless black Zimbabweans.

Uncertainty over property rights saw investment by foreigners grind to a virtual halt last year, according to Reserve Bank of Zimbabwe data.

The possible bidders for PTC include Germany’s Detecon Consulting and Dutch-based Mobile Systems International.

Mauritius Telecom, a joint venture between France Telecom and the Mauritius government, has expressed interest. The fourth group is Megatel, which represents a Canadian telecoms firm, independent Zimbabwean telecoms companies and regional banking group ABC Holdings.

The International Telecommunication Union’s latest African indicators handbook said there were 241 400 fixed lines and 309 000 mobile users in the country of 12 million in 2000.

The government’s attempts to raise money through the sale of its assets has so far been unsuccessful, with a paltry seven billion Zimbabwe dollars raised in 2001 out of the targeted 22-billion Zimbabwe dollars. It has budgeted 40-billion Zimbabwe dollars from privatisation proceeds this year.

”The PTC transaction will be the biggest transaction so far…it will raise more than a third of the 40 billion dollar target,” said Chirove.

He said the government expected to complete the partial privatisation of PTC in the third quarter of this year.

The economy in its fourth year of recession has lost a third of its jobs in the last 18 months, while inflation continues to soar above the 100% mark and foreign exchange reserves have been virtually depleted.

President Robert Mugabe, in power since 1980, sees his land seizure programme as a belated drive to correct imbalances in land ownership created by previous colonial governments.

So far, the government has partially privatised insurance company Zimre, dairy group Dairiboard and the Cotton Company of Zimbabwe.

It has sold its shareholding in the local operation of fuel giant Total. Zimbabwe is preparing sell its stakes in pharmaceuticals group Caps, financial services firm Finhold, conglomerate Astra Holdings and Rainbow Tourism Group this year. – Reuters