Zimbabwe to shut down Global Telecom Unit Telecel over License

Zimbabwe plans to close down the local unit of Global Telecom Holding SAE because the country’s third-largest mobile-phone company operated without a license and failed to comply with local ownership laws.

“They had agreed to pay their license fees installments and they failed to honor their obligations,” Information and Communication Technology Minister Supa Mandiwanzira said by phone on Thursday from the capital, Harare. Telecel Ltd. also hasn’t adjusted its shareholding to comply with laws regarding ownership of companies by black Zimbabweans, he said.

Zimbabwe’s economic growth is expected to slow to less than 3 percent this year from 4.2 percent in 2014, the International Monetary Fund said on March 10, partly because increased demand for local ownership is deterring foreign investment. Global Telecom, a Cairo-based unit of wireless carrier VimpelCom Ltd., also has operations in Algeria, Bangladesh and Pakistan.

“I’ve no comment on that issue,” Telecel Zimbabwe General Manager Angeline Vere said by phone. Global Telecom’s investor relations department couldn’t be reached when contacted by phone and e-mail.

Telecel didn’t pay a $14 million installment toward its license fee in 2013, according to Mandiwanzira. Under Zimbabwean laws, mobile operators must pay $137.5 million for licenses over a 20-year period. Telecel competes with Econet Wireless Zimbabwe Ltd. and Net One in the southern African country.

Source: Bloomberg