Telecell Saga Opens New Debate On Indigenization,Empowerment Policy

By Prince Tongogara

Telecel Zimbabwe, the country’s second largest mobile network operator,licence withdrawal by the state last week opens new frontiers for debate on the contentious and controversial indigenization policy which hitherto has been Zanu (PF) and President Robert Mugabe’s rallying call on empowerment of locals.

The mobile network regulator POTRAZ in withdrawing the licence argued that Telecel had failed on two critical issues – paying $137 million for the 15-year licence and meeting the indigenization quota which calls for all foreign shareholders to cap their ownership of any company operating in Zimbabwe to 49% maximum.

The licence withdrawal has been long incoming as the local shareholders continue to wrangle over equity among themselves in the Empowerment Corporation.

The second mobile licence given to Telecel after a botched tender bid that led to the Econet/Ministry of Information legal battle is still imprinted in the business minds. Telecel licensing has always been political and couched in strong indigenization and empowerment rhetoric.

The local shareholding had a mottle of indigenization luminaries including Jane Mutasa, Philip Chiyangwa, Leo Mugabe, war veterans, small scale miners and James Makamba. Reading between the lines one can see the Zanu (PF) subtle factions then.

Makamba’s family ties and business links to late General Solomon Mujuru were always going to be one thorn issue in fragile Zanu(PF) politics. It was not long before Makamba the Telecel Zimbabwe board chairman was arrested on forex externalization charges. He stayed nearly a year on remand in custody and only released on bail after more than five attempts. Upon his release, Makamba fled into exile where he is still holed.

In the intervening period the remaining members sought to oust Makamba without success. Telecel International the majority shareholder continued to recognize Makamba as the board chair thereby placing the company operations in jeopardy.

The government started ratcheting up the indigenization calls and asking Telecel International to sell the 11% stake to its local person in line with the dictates of the Indigenization and Empowerment Act. The Mugabe/Mutasa camp has always planned without success to snap the stake while Makamba is in exile.

In the last two months, Patrick Zhuwao, President Robert Mugabe nephew and Leo’s half-brother came on the scene purporting to be the EC managing director and seeking to dispose the corporation’s 40% shareholding to Brain Works Capital.

The deal valued at $20 million collapsed as the local shareholders quarreled over the value of the equity. Soon after, the government descended on Telecel with only one intention to shut it down and alter its ownership once and for all.

However, with speculation high that rich South African transnational company MTN hovering over the Telecel carcass questions on indigenization can be asked.

How significantly different is MTN 60% of Telecel different from that of Vimplecom? How different is white Mr. Jones from white Mr. Peterson in controlling the 60% of the local mobile operator. Is it that the citizens are failing to see something?


Or is it that the government’s policies are not political neutral and hence anyone who offends big brother (Zanu PF) despite being indigenous loses his investments? The cases of Mutumwa Mawere’s SMMH, Nicholas Vingirai’s banking empire now swallowed by ZB Holdings and Makamba’s pushing out of Telecel prove the trend of a vindictive  government?