TelOne needs US$34,6m to fund capital projects

STATE-OWNED telecommunications company, TelOne, says it requires US$34,6 million to fund capital projects with the bulk of the amount earmarked towards backbone transmission and access network deployment, core network and information systems upgrade.

TelOne performance report for the financial year ended December 31, 2022 indicates that the telecommunication industry is highly capital intensive owing to continuous ICT developments.

However, its inability to fund capital projects has been hampering business expansion.
To that end, US$34,6 million is required to fund capital projects.

“The total amount required by the company to fund capital projects for the year 2023 approximates US$34,6 million, with a significant amount prioritised towards backbone transmission and access network deployment, core network and information systems upgrade.

“Also included is the expansion of Data Centre infrastructure among a host of other projects. The telecommunication industry is highly capital intensive owing to continuous ICT developments,” reads part of the report.

The telecommunication firm acknowledges that the industry has evolved over the years with rapid technological advancements rendering most telecommunication equipment and infrastructure obsolete.

The rapid changes in the industry from analogue to digital technology has resulted in complete evolution of technologies with copper being replaced with optic fibre.

However, it said the Government which is the sole shareholder for TelOne, has not been able to inject equity into the business for a number of years leaving it way behind competition.

“Currently broadband is the leading revenue earner accounting for over 70 percent of TelOne’s total revenue.

“However, 70 percent of the broadband revenue is anchored on the copper network which is highly susceptible to vandalism and is unable to deliver the capacity and speed demanded by the modern consumer,” it noted.

It said legacy loans are amounting to ZWL268,4 billion (US$394m) a development that adversely affects its ability to attract external funding, particularly capital expenditure for transmission network deployment.

TelOne, says it requires US$34,6 million to fund capital projects

Outside of capital injection by the shareholder, the business has been looking for debt finance to transform the network and meet the demands of the digital economy.

“However, due to the legacy loans and state of the balance sheet, TelOne has failed to attract the much-needed funding to transform the business and align with other operators locally, regionally and internationally.

“This has resulted in poor service delivery and reduced growth in market share as the business struggles to compete with well-resourced existing and new entrants in the sector.

“The company hopes that the resolution of these legacy issues between Government and other multilateral financiers will breathe fresh impetus into the company.”-chronicle