HARARE – The board of State-run telecoms firm, Powertel Communications has advised against a plan to merge the company with two other public enterprises saying there is scope to rebuild it into a “cash cow” for government and its parent, ZESA Holdings-the electricity producer.
Powertel has been lined up for a merger with other State run telecoms outfits, Zarnet and Africom, according to the Transitional Stabilisation Programme (TSP), a blueprint announced by Finance Minister, Mthuli Ncube in October.
The planned merger was one of the key issues discussed during Powertel’s annual general meeting (AGM) in Harare last week, with the board saying dissolving it would have dire implications on ZESA.
Besides, ZESA would have to register another firm to provide the same service being delivered by Powertel, the board said.
Powertel was formed primarily to provide information and communication technologies to the ZESA group of companies and to commercialise excess capacity for the benefit of business and other consumers.
ENN was told on Monday that new Energy and Power Development Minister, Fortune Chasi promised to look into the issue, after being advised that his predecessor, Jorum Gumbo had bought into the idea of halting the merger.
“Generally, the board was of the view that with the right resources and support Powertel can be a good cash cow for the utility and government,” an executive who attended the AGM said.
“The view also was that the mandate the company is serving is still crucial to the utility company (ZESA),” said the executive.
Powertel board chairman, Patrick Chivaura, was not available for comment.
Under the TSP, 11 State owned firms, six subsidiaries of the Industrial Development Corporation of Zimbabwe and 17 units of the Zimbabwe Mining Development Corporation will be privatised by 2020.
An additional two State enterprise have been lined up for liquidation.
Powertel is part of 11 public enterprises that are due to be merged under the strategy.
The Powertel board’s position was strengthened by its strong financial results for the year ended December 31, 2018, which showed the firm recovering from a $3 million loss during the year ended December 31, 2017 to $263 000 profit in 2018.
The Powertel revenue rose by three percent to $25,8 million, from $25,1million in 2017.
“Operating revenue for the year under review was $25,8 million compared to $25,1 million in 2017, representing a three percent increase in revenue. The company reported a profit for the year of $263 088 in 2018, compared to a loss of $3 million in 2017,” Chivaura said.