The continued strong performance by TelOne, which has seen it post an operating profit of $523 million and growing its broadband subscriber base, is critical as it dovetails with Government’s thrust of promoting ICTs for economic growth.
This was said by Information Communication Technology, Postal and Courier Services Minister Dr Jenfan Muswere while addressing TelOne’s virtual annual general meeting yesterday.
“I have noted that TelOne has posted an operating profit of $523 million, which is an improvement from the operating profit of $449 million in 2019,” he said.
“Further, I note that TelOne has managed to contain staff costs to income ratio to 30 percent, which is within stipulated thresholds.
“The growth in revenue is commendable and I have noted that the growth is due to the 14 percent increase in home broadband subscribers to 128 545 at the end of 2020 financial year.”
Dr Muswere said the trading update by TelOne managing director Mrs Chipo Mtasa, indicates that the profitability trend was continuing to gain momentum, and broadband subscribers have risen to 129 590.
Said Dr Muswere: “This development is key in that it resonates with the drive by Government to increase access and utilisation of broadband especially as a key driver for economic development.
However, Dr Muswere expressed concern over the decline in TelOne’s voice utilisation in terms of minutes by 19 percent.
He added that it was “even more concerning” that there has been a four percent decline in voice subscribers.
To address the challenge, TelOne management was encouraged to ensure strategies are put in place to counter the loss of voice subscribers due to the fixed mobile migration.
Turning to the impact of the Posts and Telecommunications (PTC) legacy loans on TelOne’s performance, Dr Muswere said they had “been noted”, adding that the $34,7 billion legacy loan expenses have overshadowed the positive performance achieved at operating profit level.
“On behalf of the Ministry of ICT, Postal and Courier Services, I wish to reiterate our commitment to clean up the company’s balance sheet by warehousing the legacy loans in line with resolutions passed by the Cabinet in March 2019.
“It is encouraging to note that Ministry of Finance and Economic Development has already expressed willingness by the shareholder to warehouse TelOne’s legacy debt.
“I am very confident that the Government will resolve this issue by end of 2021 financial year. With a stronger balance sheet, TelOne is expected to be able to finally declare a dividend,” he said.
TelOne board chairman, Dr Douglas Zimbango, told the virtual meeting that they “remain confident of our ability to deliver our vision through the dynamic strategies that are coming through as well as the support of the shareholder, as has become custom.”