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FIXED telecommunications company, TelOne (Pvt) Limited, is hamstrung by a legacy debt amounting to ZWL$335 billion, according to the Auditor-General (AG)’s 2022 report.
The fixed telecommunications company incurred losses amounting to ZWL$112 billion (2021: ZWL$53.3 billion) in the 2022 financial year.
“The entity has significant legacy loans and borrowings amounting to ZWL$335,05 billion (2021: ZWL$194,2 billion) principal plus interest accruals,” the report read.
“These conditions, along with other matters set out in the financial statements, indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern”.
The Auditor General noted that the company had not been able to secure foreign currency to service foreign loans.
“As a result, finance costs were now more than the capital amount due to non-servicing of the loans. The amounts that were owed as of December 31, 2022, was US$393,8 million (2021: US$413,3 million),” the report read.
The Auditor General [AG] said, “The company should pursue strategies to service the loans such as pleading with the Finance Ministry to facilitate warehousing of legacy loans”.
The government auditor also noted that TelOne had not upgraded its internet and communication infrastructure as it was still using copper cables.
The report noted that as a result, there were significant instances of copper cable vandalism during the year ended December 31, 2022, which affected over 50,000 customers.
“Attending these faults on time was putting pressure on the company’s resources,” the report read.
The report stated that the company should continue to look for ways to raise funds to expedite migration from copper to modern technologies.
The report indicated that TelOne had an aged fleet of motor vehicles, with some vehicles having been bought as far back as 1992. As a result, the company is incurring high costs of repairs and maintenance on the vehicles.
“A total of ZWL$3,5 billion (historical ZWL$2,66 billion) was incurred during the year, while ZWL$2,58 billion (historical ZWL$612 million was incurred in 2021, an increase by 37percent (335 percent historical),” the report read.
Indications were that repairs and maintenance costs incurred may exceed the costs of acquiring new vehicles. The AG recommended that the company consider recapitalizing its transport department. The report also said findings showed that TelOne was not maintaining its properties.“For instance, houses in Masvingo, Mashava, and Mwenezi had non-functional sewage systems and had roof leaks and cracked walls that were due for repairs. Tenants were resorting to repairing the buildings using their funds,” the report read
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