Mutapa plots telecoms behemoth

LIVINGSTONE MARUFU

Mutapa Investment Fund (MIF), Zimbabwe’s sovereign wealth fund, is exploring the creation of a telecoms behemoth by consolidating the balance sheets of state-linked operators—NetOne, TelOne, Powertel, and Telecel—into a single, streamlined entity, Business Times can report.

The move is designed to unlock scale and equip the country’s digital infrastructure to withstand competition from global disruptors such as Elon Musk’s Starlink.

The consolidation plan was revealed by Mutapa’s Chief Investment Officer, Simba Chinyemba, who framed fragmentation as an existential risk in an era of satellite-driven competition.

“In telecommunications, fragmentation is now a luxury we cannot afford. Satellite entrants like Starlink have reset the competitive landscape. To compete, we intend to consolidate NetOne, Telecel, Powertel and TelOne balance sheets to unlock scale, and fund 5G and fibre-to-the-home,” Chinyemba said.
“Digital infrastructure is no longer optional, it is the highway of modern growth.”

The plan comes as some of these telecoms operators struggle to attract fresh capital for critical infrastructure expansion projects. Legacy debts continue to weigh heavily on the companies’ balance sheets, threatening their viability and discouraging potential investors.

Telecel Zimbabwe, for instance, has been formally placed under receivership, entering voluntary corporate rescue to salvage its operations after years of decline.

Under Zimbabwean law, corporate rescue provides financially distressed companies with supervised rehabilitation, allowing debt restructuring and operational overhaul while avoiding liquidation.

The consolidation plan by Mutapa echoes earlier government efforts.

In 2019, Finance Minister Professor Mthuli Ncube proposed raising about US$350m by selling majority stakes in state-owned telecoms assets, including packaging TelOne and NetOne as a single entity.

“We are confident that this approach of offering the two companies as a package is the way to go. They are joined at the hip and they are best working together, and I think that will get value for money this way and we will see a more competitive sector that will benefit the user in the long term,” Professor Ncube said at the time.

Starlink’s entry into Zimbabwe in September 2024 disrupted the market almost overnight, delivering high-speed, low-latency broadband and raising consumer expectations in a country long accustomed to slow, unreliable, and expensive connectivity.

By contrast, telecoms under Mutapa’s portfolio have been hampered by legacy debt, aging infrastructure, and weak balance sheets, leaving them structurally unable to invest, innovate, or respond to global competition.

The proposed consolidation represents a deepening of government attempts to rationalise Zimbabwe’s telecoms sector.

In 2014, authorities encouraged operators to share towers, fibre, and other passive infrastructure to reduce duplication, cut costs, and lower data tariffs. This initiative was formalised through Statutory Instrument 137 of 2016, which made infrastructure sharing compulsory despite industry resistance.

While sharing reduced some duplication, it failed to address deeper financial weaknesses that continued to constrain investment.

By enforcing consolidation across its telecoms holdings, Mutapa aims to cut operating costs by up to 30%, capital expenditure by as much as 60%, and accelerate network rollout, particularly in underserved rural areas.

Chinyemba said the timing was deliberate, noting that Zimbabwe now stands at a defining juncture marked by macroeconomic stabilisation and the gradual restoration of order.

“For decades, Zimbabwe has been described as a country of ‘vast potential.’ Yet potential, on its own, doesn’t mean much. Potential is a dormant seed. Transformation is the act of cultivation, turning that seed into a harvest,” he said.
“History teaches us that economic transformation is not about growth alone. Many countries grow, (but) very few transform.”

Established in 2014, Mutapa was rebranded and restructured in 2023 under Statutory Instrument 156 of 2023, with an explicit mandate to monetise state-owned assets and foster economic growth.

Its portfolio spans telecoms, mining, energy, infrastructure, agriculture, ICT, finance, and real estate, and is valued at approximately US$16bn.

Yet, Chinyemba described the holdings as reflecting a national paradox.

“Asset-rich, cash-poor. As a country, we possess lithium, gold, land, power plants, railways,  yet we struggle to fund infrastructure, service debt, and crowd-in private capital,” he said.

The “Resources to Results” strategy under National Development Strategy 2 (NDS2) is designed to resolve that paradox by converting dormant assets into cash flows capable of funding growth enablers without permanent reliance on the fiscus.

“Turnarounds require transparency before credibility. Cleaning the books is not weakness, it is the foundation of investor confidence,” Chinyemba said.
“Governance reform is not a parallel process, it is the core of value extraction.”

Through telecoms consolidation, Mutapa is betting that scale, clean balance sheets, and disciplined governance can transform Zimbabwe’s digital infrastructure from a chronic drag on competitiveness into a platform for economic transformation.

“This is how nations transform,” Chinyemba said.
“Asset by asset, institution by institution, value chain by value chain.”