IN its 2022 report, the Auditor-General (AG)’s office tells us that fixed telecommunications company, TelOne (Pvt) Limited, is burdened by a heavy $335 billion legacy debt.
The debt is so serious that the AG now strongly doubts “about the company’s ability to continue as a going concern”, meaning that the State-owned enterprise’s very continued existence is in serious doubt.
This is, indeed, very sad news.
However, we would like to argue that the parastatal is in this unsustainable mess because of its own fault after those managing the entity proved to be incompetent at their work.
Firstly, and most importantly, why was the company continuing to borrow when legacy loans were fast accruing interest? This was tantamount to digging its own grave and at this rate it could be fast sinking in quick sand.
Secondly, and which makes some of us doubt the management capabilities of those at the helm at TelOne, why did the firm choose to borrow in the first place when it has millions of dollars’ worth of infrastructure across the country?
If one travels across Zimbabwe today, even to far-flung corners of the country, they will come across such infrastructure as poles and cables abandoned along highways and in the countryside following the advent of the digital age.
It is quite puzzling why TelOne failed and is still failing to recover that infrastructure and sell it to recyclers? It further boggles the mind that when thieves help themselves to the infrastructure, TelOne is quick to move in to have them arrested. It is even wasting a lot of money printing stationery warning cable thieves.
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If the infrastructure is so important, why is TelOne allowing it to rot in the countryside? What is stopping it from collecting it? Why is TelOne choosing to borrow huge amounts of money, instead of simply recovering that infrastructure, sell it and raise capital for its new projects?
The State enterprise should never have borrowed a single cent from the onset because the infrastructure it used to possess before the digital age kicked in was more than enough to raise capital for the company’s migration to the new era of wireless and fibre technology.
From the look of things, managers at TelOne chose the easy route of borrowing which effectively created the company’s current financial mess, a bog it may fail to rise from if something is not done urgently.
As we speak a lot of valuable infrastructure is still out there which TelOne can easily convert into cash.
If this suggestion does not make economic sense, then we advocate that those who help themselves to the infrastructure should not be arrested because the owners of the stuff no longer see any value in it. Even those who have been jailed should be released forthwith because they cannot remain in jail for stealing useless scrap.
As it is, all TelOne’s abandoned infrastructure is junk, hence one cannot be arrested for helping themselves to junk.
