Consolidation is the way to go for telecoms operators

Mutapa Investment Fund’s chief investment officer, Simba Chinyemba, outlined plans to clean up and consolidate the balance sheets of Zimbabwe’s State-linked telecommunications operators, arguing that the move has become unavoidable as global competitors such as Starlink steadily shave off market share.

The proposal to merge NetOne, TelOne, Powertel and Telecel into a single telecoms giant is, at its core, a sound and overdue strategic shift by the country’s sovereign wealth fund.

For years, Zimbabwe’s telecoms sector has laboured under the weight of legacy debt, fragmented operations and chronically weak capital bases. Infrastructure sharing, regulatory adjustments and periodic tariff reviews may have softened the pressure, but they never addressed the underlying illness. The result has been operators too indebted to invest, too small to compete and too fragile to attract meaningful capital.

Starlink’s entry into the market in September 2024 brutally exposed that vulnerability. In one stroke, it punctured the illusion that protection, incumbency or regulatory comfort could substitute for scale, capital depth and execution. From that point, fragmentation ceased to be merely inefficient and became existential.

It is against this backdrop that Chinyemba’s emphasis on “cleaning the books” stands out as the most consequential element of Mutapa’s strategy.

Balance-sheet consolidation restores credibility. It signals to investors that the State is prepared to confront losses honestly, restructure debt transparently and draw a clear line between commercial reality and political sentiment.

This is precisely where earlier reform efforts faltered.

Packaging assets without repairing their finances simply shifts problems from one pocket to another. Telecel’s placement under corporate rescue serves as a stark reminder that distress ignored does not disappear—it compounds.

If executed decisively, consolidation offers Mutapa more than operational efficiencies. It creates a credible platform for capital mobilisation, lowers the cost of borrowing and makes long-term network investment feasible. In capital-intensive industries such as telecommunications, governance and balance sheets are not peripheral concerns; they are strategy.

Mutapa’s telecoms bet is therefore a test case, not only for the sector, but for the State’s willingness to accept that clean balance sheets are not an accounting exercise. They are a prerequisite for competitiveness, resilience and, ultimately, economic sovereignty in a globalised market.