Things are looking difficult for state-owned Zimbabwean mobile operator NetOne, which is now reportedly technically insolvent.
In a report released last week, the country’s acting Auditor-General Rheah Kujinga revealed that the firm’s total liabilities exceeded its total assets by ZWL$32 billion (about US$933,547) in 2022. The firm posted a loss of ZWL$40 billion (US$1,166,975) for the financial year ended December 31 2022.
Can NetOne continue operating? It’s not clear what its current balance sheet looks like, but the firm has undoubtedly been losing active subscribers. Local news resource Zimbabwe Situation notes that in the first quarter of 2024 the firm recorded a 5.52% dip in active subscribers to 4,017,167 from the previous quarter, while the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has reported that NetOne’s market share contracted by 6.66 percentage points to 11.84% in the first quarter from the fourth last year.
One issue seems to be that NetOne’s debt management policy, which requires suspension of services 90 days after barring of outgoing calls, hasn’t always been enforced.
However, NetOne is not alone in experiencing difficulties. All mobile operators – the other big names are Econet and Telecel – have had problems setting tariffs that allow them to reimburse suppliers, many of whom expect to be paid in foreign currency rather than the ZiG, the nation’s sixth attempt at a stable local currency in 15 years.
In addition Telecel Zimbabwe had a difficult 2023; in May we reported that it had been placed under bankruptcy protection measures to avoid liquidation.
Zimbabwe Situation says that, in response to the audit findings, NetOne has committed to address unaccounted cash deposits into its accounts and upgrade its software to better capture performance as well as data.
