Telecel Zimbabwe on the verge of collapse says labour union

Telecel Zimbabwe on the verge of collapse says labour union

Communication and Allied Services Workers Union of Zimbabwe lodges appeal with government.

Telecel Zimbabwe is on the brink of collapse, according to the Communication and Allied Services Workers Union of Zimbabwe.

The company has cited local currency depreciation, difficulties accessing foreign currency to pay off vendor and imported equipment obligations, as well as other broader operational bottlenecks, as contributors towards its current situation.

Telecel Zimbabwe issued a press statement which reads in part: "Rapid depreciation of the local currency and the levels of tariffs increases approved, which continue to lag behind inflation" as having affected its "ability to meet the foreign currency denominated obligations" such as spares for equipment and Service Level Agreements and support.

"This limited vendor support has resulted in some network disruptions during the festive season, which have since been rectified. In order to mitigate these challenges, the Company has been on a very aggressive import substitution and local skills transfer," said the company on Friday.

On 15 January 2020, the Communication and Allied Services Workers Union of Zimbabwe lodged an appeal with the ICT Ministry to intervene and said the situation at Telecel Zimbabwe "has deteriorated to unimaginable proportions."

The Union said worker's plight was worsened by "very low and uncompetitive" remuneration.

David Nhambare, secretary general for the Union, stated, "The business is now technically insolvent and failing to pay creditors, n fact the liabilities now outstrip assets by far. The revenue has gone down to an average of ZWL7 million per month (and) the network availability has been cut by more than 64% with a few towns and cities only having network available in the CBD or when electricity is available which is during odd night hours."

Additionally, the daily operations of Telecel Zimbabwe have been "affected by dysfunctional IT systems", with subscribers unable to top up airtime.

According to the Union, some Telecel Zimbabwe employees are using competitors' SIM cards to continue to keep working.

The company acknowledged these challenges in its statement and stressed that its main switching centres have been subjected to prolonged power outages.

This had resulted in the company's technology operating costs "ballooning due to the use of alternative power, particularly diesel, and has in turn affected base station availability" in other parts of the country.

Telecel added that it is engaging the government "to ensure a dedicated power line to the switching centres" while it is also "investing in alternative power solutions such Tesla solar batteries" for its base stations.

Last week, Econet Wireless said sub-optimal tariffs were occasioning challenges for the company and it has formally requested authorisation from the telecom industry regulator to raise tariffs.

Econet Wireless has had to install hybrid batteries from Tesla as well as to switch on solar power for its base stations and switching centres.