An operator falls, a bully triumphs

16 Aug 2007

Pop quiz: You're a third world dictator in a country with inflation at 4,500%, unemployment at 80% and a quarter of your population fleeing the country. What do you do‾

Obviously, you put the squeeze on a mobile operator.

That's the situation facing Telecel Zimbabwe, where Leo Mugabe, nephew of President Robert Mugabe, has forced the cancellation of the license.

Mugabe Jr has been running a campaign against the company and its 40% local shareholder, Empowerment Corp. (EC), for some time.

His triumph is complete because the regulator Potraz has canceled the operator's nine-year-old license. The main shareholder, Orascom, was supposed to sell down to EC by this year but, as you'd expect in Zimbabwe today, the local investor didn't have the cash.

Young Mugabe didn't have the readies either, but that didn't stop him from claiming he owned a piece of EC. The company, set up specifically to invest in Zimbabwean assets, refused him because his worthless cheque bounced.

Mugabe last year insisted Telecel give him a contract to provide "technical services", claiming he should be paid 1% of all revenues.

Now the company has gone down and Orascom, a successful Egyptian firm that owns a string of cellcos across Africa and the Middle East, is trying to find a judge who will hear the case.

The real losers, as ever, are the long-suffering people of Zimbabwe. In a country where food, fuel and power are in short supply, Zimbabweans are about to lose one more option.

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