TelOne to roll out pre-paid billing to recover US$160 million debt?

TelOne managing director Chipo Mtasa

TELONE plans to roll out prepaid billing for its fixed telephone service in a bid to boost revenue income and recover the $160mln debt it is owed by customers nationwide.

Speaking at a media cocktail on Wednesday, TelOne managing director, Chipo Mtasa said the parastatal has decided to follow in the footsteps of ZETDC in recovering its debt by deducting a certain percentage on every prepaid payment.

“We have a huge debtor’s book in excess of US$160 million this is comprised of corporate, households and state owned entities. In each category there is strategy, ultimately we want to introduce a prepaid billing platform for it is better to have revenue collected than to have uncollected revenue in our books. This will help us to recover our debt through value propositions and address the issue of interconnection which other players keep raising with us. We are also grateful to government for the offset arrangements which help us to go by,” she said.

She said TelOne has approached government to free its balance sheet by warehousing its US$322 million legacy debt to enable the company to access fresh capital at reasonable rates.

She said TelOne has since laid out 3000kms of fibre in the country which has enabled the firm to offer Fibre To The Home (FTTH) to complement the popular ADSL. The firm has also established 150 public wifi hotspots nationwide with an additional 100 in the pipeline.

Mutasa said the firm is planning to modernize its infrastructure so as to enhance the services on offer.

“We want to transform the core technology and bring in new modernized technology, an exercise which will cost us US$98 million. The project was meticulously planned; we have since awarded the tender to Huawei through the State Procurement Board. We engage in price benchmarking for the project every year. I must hasten to say that there are aspects of the project that we are already rolling out like the FTTH and ADSL expansion, which means when we eventually conclude our fundraising efforts, we will re-spec before putting in a final order with the winning bidder,” she said.

The MD said TelOne is considering venturing into real estate so as to fully exploit its expansive infrastructure presence countrywide.

“We have 150 points of presence countrywide, these are houses and buildings that are owned by TelOne, and implicitly this gives us another opportunity in real estate that we might have to explore as time goes on. As we transform into a modern ICT company, we may not need as much space as we have been utilizing from the past. In some areas we are already moving out from rented facilities to our own facilities that just need a bit of patching up,” she said.

She said TelOne has implemented a 15 percent salary cut for the coming six months as the firm’s revenues are under strain due to the revised tariffs and reliance on value added services by customers as compared to the traditional voice service. She said the firm is also looking at cutting internet transit costs so as to earn a reasonable margin.

Mtasa said TelOne will not retrench its employees as the firm has a voluntary early retirement program for employees that are 55 years and above. FinX