Zimbabwe: U.S$700 000 RBZ Bailout for Telone

Source from:  Financial Gazette (Harare) September 20, 2006 09/25/2006

STATE-owned phone operator TelOne needed a US$700 000 bailout from central bank to pay off a debt that had seen Zimbabwe's international link shut down last week, causing a 90 percent drop in Internet traffic. TelOne spokesman Phil Chingwaru confirmed sending a plea letter to the Reserve Bank of Zimbabwe (RBZ), but had not responded to requests made last week for further details by The Financial Gazette. RBZ governor Gideon Gono also confirmed extending foreign exchange to TelOne to relieve debts owed by the fixed phone monopoly in service charges. The Independent Internet Service Providers Association, which groups the country's ISPs, blamed slower browsing speeds on the shutdown of TelOne's Intelsat, the country's largest international Internet link. Traffic volumes were 90 percent down on the shutdown, the ISPs reported. "This is catastrophic as all legal Internet Service Providers utilise TelOne for their outgoing bandwidth to the World Wide Web as well as for e-mail traffic. Thus all such ISPs have and are being affected by this downtime. In short, this is causing an almost collapse of the Internet in Zimbabwe," said MWeb, the country's largest ISP, in a notice to its subscribers. TelOne technical director Hamton Mhlanga recently revealed that the company was saddled with foreign debt of US$18 million and was desperate for cash to replace ageing equipment, over half of which is well past its use-by date. The company made US$10 million from an involvement in tobacco that Mhlanga said was necessary to raise foreign currency for its operations. Enditem