TWO months -- that's the time it took for local mobile operator Telecel Zimbabwe to fall off the market after securing a buyer and be put back in play again.
After the talks of a US$20 million offer for a significant slice of Telecel Zimbabwe surfaced in January this year, we all thought this was the definitive moment in the mobile network operator's ownership structure.
Instead, it turned into something of a sideshow that was a display of greed and the tough lessons that are learnt from building any business under opaque circumstances.
A couple of weeks ago it was reported that Brainworks Capital, the investment outfit that had offered to buy 40 percent of Telecel Zimbabwe was withdrawing its offer. The reasons cited included the continued legal tussles that have been focused on contesting the deal and have put Brainworks under public onslaught, as well as the failure of the Empowerment Corporation to respond to the offer made by Brainworks.
Rather than an acceptance or refusal of the offer, Brainworks was instead invited to a bidding process for the 40 percent share that it thought it had secured. The inevitable happened, and Brainworks pulled out of the deal.
Now, Brainworks has gone on to secure US$35 million in capital that will be directed to bolstering of its existing stakes in local businesses and more significantly in local telecommunications. Brainworks will, however, not be making those investments into Telecel. That last bit on staying away from Telecel hasn't surprised anyone really.
From every indication so far, Empowerment Corporation and its ownership of Telecel Zimbabwe is one huge mess, and any investor having to untangle that just to buy into an aggressively competitive industry would be frustrated and move away.
What we have seen happening with Telecel and the "soft intervention" from the Ministry of ICT ought to serve as a lesson to corporate raiders, opportunists or any other investors interested in Telecel Zimbabwe. A lack of unified purpose and long term view of any investment, especially in an industry like telecommunications where the rewards are not always immediate, does nothing but alienate parties worth engaging with for future benefit.
With Brainworks out of the picture, finding another local investor willing to shore up an eight figure investment for Telecel isn't going to be easy. This creates a frustrating situation for the mobile operator and drives away other local and international investors that might want to buy Vimpelcom out of the remaining stake in Telecel that it holds.
The absence of an investor means stunted growth for Telecel which, has, in better days, proved to be a formidable competitor to the dominance that Econet has in the industry. The Empowerment Corporation is also left holding 40 percent of a mobile operator that is underperforming and cannot attract additional investment that it (the Empowerment Corporation) cannot raise.
It shouldn't be about greed and quick gain, but a long-term perspective. Looking at the roster of local investors that have a stake in Telecel right now (or claimed to have a stake at least) and were engaged in disputes over who would get what, there is a lot of experience in entrepreneurship that is shared by these individuals.
Surprisingly, they haven't taken a long-term view of how to make the most of their ownership of a fully operational telecommunications concern. There is still a lot of potential in the Zimbabwean telecommunications market that can be tapped if the right decisions are made, something that Brainworks had observed when it made its offer.
According to the most recent figures from the Post and Telecommunications Regulatory Authority (POTRAZ), 99 percent of internet connections in Zimbabwe are made through mobile devices. With the mobile phone clearly assuming such an important role in providing access to internet services for Zimbabwe, there's a gamut of opportunities for industry operators and rewards for investors through online services, something that looks beyond what the industry is focused on right now.
The best thing for anyone with a hand in Telecel or a future interest in the operator is to resist any greedy urges, figure out how to get out of the ownership mess that is still plaguing Telecel and get into this investment with a bigger picture view of this investment. This will have a huge impact on growth plans for the mobile operator and help improve its competitiveness in a three man race that it is now losing.