State-owned telecommunications operator TelOne has adopted an ambitious transformation strategy that will require about US$250 million to reinvent the company from a traditional fixed-line operator into a fixed-mobile converged digital services provider.
Presenting the strategy and TelOne’s first-quarter performance during the company’s annual general meeting, chief executive officer Mr Lawrence Nkala said the 2026-2030 strategy would position TelOne to compete in Zimbabwe’s rapidly evolving digital economy.
This comes amid growing use and demand for broadband, cloud computing, artificial intelligence (AI) and Internet of Things (IoT) solutions globally.
“The programme will focus on expanding fixed wireless access, upgrading next-generation fibre and core network infrastructure, increasing data centre capacity, deploying AI-enabled services and cybersecurity solutions and accelerating smart city projects.
“The scale of the investment requires a stronger capital structure, making equity financing the preferred funding option.
He added, “Our aspiration is very clear. We want to move from being a traditional fixed business model that is heavily dependent on fixed-line services to becoming a fixed-mobile converged digital service provider built on next-generation technologies,” he said.
Mr Nkala said Zimbabwe’s telecommunications sector was undergoing a fundamental shift towards a data-driven ecosystem, with mobile internet now accounting for the bulk of the revenue in the industry while demand continued to grow for fibre connectivity, fixed wireless access, cloud infrastructure and digital platforms.
“The telecoms market is becoming increasingly data-centric and infrastructure-intensive. Operators now have to invest continuously in broadband infrastructure, artificial intelligence-enabled services, cloud ecosystems and data platforms,” he said.
He added that operators were also grappling with rising operating costs, particularly energy expenses, while growing competition from satellite internet providers and aggressive data pricing continued to compress margins in the industry.
Against this backdrop, Mr Nkala said TelOne’s strategy seeks to reposition the business from reliance on legacy copper infrastructure to modern digital networks that support modern technologies.
He said the transformation programme is anchored on four strategic pillars.
The first focuses on infrastructure and network modernisation through the deployment of next-generation broadband networks, expansion of fibre infrastructure, upgrades to the national IP core network, rollout of fixed wireless access using 5G technologies and increased data centre capacity to support AI computing.
The second pillar seeks to enhance customer experience by improving network availability, accelerating service delivery and introducing new digital products and services.
Operational excellence forms the third pillar, with the company looking to implement digital systems that improve efficiency, streamline processes and reduce turnaround times.
The last pillar centres on organisational capability, with significant investment in skills development and cultural transformation to prepare employees for emerging digital technologies.
“The new technologies require different skills. We need to invest in our people and build the right culture because no matter how good the strategy is, without the right culture, it cannot succeed,” Mr Nkala said.
He also noted that several strategic projects were already underway, chief among them being the rollout of fixed wireless access, which is expected to complement fibre infrastructure and accelerate broadband connectivity, particularly in areas where fibre deployment is not commercially viable.
He added that TelOne was also upgrading its national transmission backbone after existing capacity became increasingly constrained by rising internet traffic generated by the company, the Government and enterprise customers.
“We have reached a stage where our transmission capacity is exhausted because we carry traffic for ourselves, the Government and many enterprise customers. We therefore need to upgrade the backbone to meet growing demand,” Mr Nkala said.
Mr Nkala said TelOne currently operates three data centres with a combined power capacity of about one megawatt, which will be inadequate to support future digital workloads.
“We need to deploy GPUs, storage capacity and computing infrastructure that will support artificial intelligence requirements for the country,” he said.
He said TelOne was also replacing ageing copper infrastructure with fibre in high-value areas while complementing fibre deployment with fixed wireless technologies to improve nationwide connectivity.
“Beyond telecommunications infrastructure, the company is positioning itself as a provider of digital solutions through smart city initiatives.
“One of the flagship projects under implementation is a smart traffic management system being deployed in partnership with the City of Harare,” he said.
Mr Nkala said the first phase, covering 20 intersections, had largely been completed using locally developed software and locally manufactured supporting infrastructure.
The system incorporates intelligent cameras and digital traffic management technology designed to ease congestion while showcasing Zimbabwe’s growing capability to develop locally engineered smart city solutions.
Financially, TelOne delivered modest growth during the first quarter of 2026 despite a challenging operating environment.
Revenue increased to approximately US$25 million, representing about 2 percent growth compared with the same period last year.
Gross profit reached US$21,7 million, translating into an 87 percent gross profit margin and highlighting the resilience of the company’s core operations.
However, elevated operating costs continued to weigh on profitability, with operating expenses amounting to approximately US$24,5 million, leaving TelOne with an operating profit of just under US$100 000 for the quarter.-gerald
