Ray of hope on horizon for TTCL
BY SYLIVESTER DOMASA
29th January 2015
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TTCL Chief Executive Officer Dr. Kamugisha Kazaura (R) together with MS Huawei Technologies Managing Director, Bruce Zhang shake hands after sealing a US$182million deal on Tuesday.
Tanzania Telecommunications Company Limited (TTCL), a former subsidiary to the East African Post and Telegraph Company is the oldest and largest fixed line telecommunications company in Tanzania.-
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With strong experience in the telecommunication industry in the country, the firm had subsequently been subjected to endless managerial and financial challenges landing to little complements to compete in the fast-growing industry.
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Financial instabilities that hit the company since 2001 resulted into partial privatisation of the firms 35 percent of its shares to Bhart Airtel Tanzania.-
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The Parliamentary Committee for Public Accounts (PAC) had recently questioned why the government was slow to repossess the shares, considering that the deal signed between the two was not profitable to the majority shareholder.
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For TTCL to regain its shares, at least 14bn/- has to be paid to its co-shareholder.-
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The amount is nearly three times what the government presented mid last year to the Indian group Bharti Airtel. Before rejecting the deal, Tanzania had wanted to purchase the 35 percent share at 5bn/- (about US$2.3million).
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This meant that if the countrys telecom firm would secure the shares to 100 percent, it could turn itself into a more effective competitor controlling the fixed line and CDMA mobile operator.
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While TTCL Chief Executive Officer Dr Kamugisha Kazaura admits that there had been improvements in revenue collections from 92.4bn/- in 2012 to 93.6bn/- 2013.-
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Its clear that chances to improve revenue collections are still available especially if the firm would retain the shares and effectively implement its long-term plans.
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On Tuesday TTCL announced to seal a deal worth US$182million with Chinese multinational networking and telecommunications equipment CompanyHuawei Technologies to improve service quality and end-user experience.
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The deal would see, Huawei help improves TTCLs landline and mobile Information Communication Technology (ICT) networks across the country.
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Currently the company has less than 1.0 percent of the wireless market share while its co-shareholder enjoys about 33 percent and 38 percent share for the leading Vodacom Tanzania.
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The discussion to regain the disputed shares commenced in 2013, even though TTCL boss told reporters in Dar es Salaam early this week that the dispute nears end.
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Were at good stage of concluding this matter, he said.
Unconfirmed reports suggested that Bharti Airtel shares are prized at 3.8bn/- but there were concern that the latter wants 21.5bn/- to free the shares.
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Zitto Kabwe PAC Chairman was quoted as saying the parliamentary public accounts watchdog committee has tasked the treasurer registrar to assess the financial viability of TTCL for revive and back-up plan.
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Zitto revealed that TTCL had an accumulated losses amounting to 334.5bn/- following inactive investments and maintenance of its infrastructures for the last 14 years.
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Dr Kazaura confirmed that the firm was in financial difficult and needed a helping hand from the government to put it round.
TTCL is facing financial instability
but were not broke as one would rush to conclude.
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We have plans going-on and soon we will be on the right truck, he smiles as saying.
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In details, Dr Kazaura highlights that apart from accumulated losses, the firm is facing shareholder equity of about 90bn/- which in turn worries creditors.
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Kazaura told reporters while the government is finalising discussion for retaining the 35 percent shares, the firm is implementing its strategic plan in collaboration with Huawei to strengthen its connectivity.
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TTCL Chief Executive Officer is optimistic that the deal signed with Huawei will transform the firm technology and improve service quality and end-user experience domain.
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It will make us stronger and more powerful to service our customers competitively in the local market.
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Among several interventions, the government is also working on the plan to clear all the debts it owes the telecom firm for it to ensure optimum quality and superior services in the country.
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As TTCL owed various government institutions more than 2bn/-, the government telephone company is also supposed to pay over 105bn/-- debt it acquired from the government and non-governmental organisations.
The firm is also unable to pay 25bn/- debt to Tanzania Telecommunications Regulatory Authority (TCRA).
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As soon as the government clears the debt, now in pipeline would revive the companys operation.
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Presenting the alternative budget for the ministry of Communications, Science and Technology for 2014/2015 financial year, shadow minister, Habib Mnyaa, made it clear that the government should make sure people gets back their TTCL by clearing the debts.
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We need our people to continue enjoying TTCL services, he said.
Minister for Communication, Science and Technology, Prof Makame Mbarawa reacting to concerns said the government is planning major re-organisation of TTCL so it would maintain its position despite stiff competition.
The Minister did not outline the plans but called on the firm to strive to improve efficiency.
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Huawei and TTCL new deal is no wonder that would see broader transformation of the firms operation across the country. The ongoing improvements were earmarked last year and would be implemented through 2017.
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Under the deal, Huawei will facilitate quality access of TTCL especially in remote areas by expanding network coverage. The focus is to ensure our customers be it mobile phones, landline and Information Communication Technology users get quality service
the project will cost $182million.
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In delivering innovative solutions to transform the communities in which TTCL operates, Huawei will lead the construction of 4G long term evolution (LTE), 3G-UMTS and 2G-GSM networks.
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The firm is also off for rural communications facilities. It is intending to install telecommunication facility to 69 wards forming 400 villages. The plan is financially backed-by the Universal Communications Service Access Fund (UCSAF).
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UCSAF had committed US$10million to facilitate the rural telecom penetration.-
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This grand pact is part of ambitious effort to enable Tanzanians to access quality and affordable telecommunication services in the country, he said.
Huawei Country Managing Director Bruce Zhang says the agreement signed between the two symbolizes a new friendship.
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This is the long-term partnership and we will build new advanced network and technology to help TTCL win the local market.
Among the recently improvements TTCL undertook include introducing an integrated business and operational support system.
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The system is projected to improve data and voice services for fixed and mobile networks, according to the firms Chief Marketing and Sales Officer Peter Ngota.
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The introduction of a new system was necessary because TTCL possesses the industrys largest sensitive customer base and product portfolio.
SOURCE: THE GUARDIAN