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Zimbabwe: Government cancels license Print E-mail
Friday, 10 August 2007
The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has cancelled Telecel's operating licence due to issues with its share structure.

Potraz says Telecel violated telecommunications regulations which stipulate that mobile operators must be majority locally owned. The majority stake of 60% in Telecel Zimbabwe is currently owned by Telecel International while the remaining 40% is owned by Empowerment Corporation (EC), a locally owned company. Telecel’s license was awarded to EC in 1997 as part of government's  indigenisation efforts.

A Potraz statement says: "Telecel Zimbabwe (Pvt) Ltd was allowed to operate with a foreign majority shareholding on condition that the ownership structure would be regularised within a period of five years from the commercial date of the licence.

"Telecel Zimbabwe (Pvt) Ltd has now been operating for more than eight years with a foreign majority shareholding and has failed to regularise its shareholding structure within the period allowed. The company therefore stands in breach of both the licence conditions as well as provisions of Section 36 of the Act.”

Potraz had given Telecel until June 30 to rectify its shareholding structure according to the regulations.

EC had the right to purchase 11% of the operator from Telecel International to restructure the shareholding to satisfy the law. However, EC could not raise the foreign currency required to buy the stake. Telecel's lawyer, Jonathan Samkange said that the company had prepared an appeal against the cancellation and was looking for a judge to hear the matter.

Telecel has experienced trouble over the past two years as Leo Mugabe has insisted that he be given a stake in EC. Other EC members have resisted his demands saying Mugabe was never a member of EC because his cheque for the joining fee was returned by the bank. In April 2006, Mugabe demanded that Telecel give him a contract to provide technical services to the company. He said he was entitled to 1% of the company's total revenue.

Source: Zimbabwe Independent - WDR/Intelecon Regulatory News.