Mozambique: Repositioning and search for viability at Tmcel – MediaFax

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Mozambique: Repositioning and search for viability at Tmcel – MediaFax

4:13 CAT | 18 Nov 2022

File photo: Domingo

The process aimed at putting Mozambique Telecom (Tmcel) back on the list of viable companies which produce dividends for its shareholders may involve privatising it, opening opportunities to potential companies interested in taking over what was once one of the country’s main companies producing considerable dividends for the state, but which is now in crisis and it cannot even pay its workers’ wages.

The move towards privatisation was raised this Wednesday by Minister of Transport and Communications Mateus Magala while addressing the Assembly of the Republic, within the scope of the responses of the government to questions raised by all the three parliamentary benches.

According to Mateus Magala, a study aiming to give the government the best idea of what to do with Tmcel is already in its final phase. According to Magala, the study will be completed next year and will lay out, objectively, the best direction for the company, which resulted from the merger of the former Telecommunications of Mozambique (TDM) and Mozambique Cell (MCell).

Magalaparliament.carta_ — *Image: Carta de Moçambique*

“We started a reform process and that process is informed by a study of what we should take. We still don’t have an option, but the options range from privatising or even socialising companies,” the minister said, noting that, for now, it was not known what the “socially and politically correct” option would be.

For the minister, who recognizes the weak situation of the company, every care should be taken to avoid measures that could result in other problems for the public limited company.

“We asked for studies in this direction,” Magala said. “These studies are being carried out and we believe that, by the end of this year and the beginning of next year, we will already have studies that will better equip us regarding the decision of what to do with these companies in order to transform them into revenue centres, not cost centres, which is what they are today.”

The minister also guaranteed that the issue of salaries at Tmcel, which has already resulted in threats to stop activities, will be fully resolved by next week.

“We already have money and the payment processes will go ahead,” Magala said, promising to publicly confirm that wages, including those that are in arrears, have actually been paid.

Apart from management issues, there also seems to be a consensus that the state has been positioning itself as the villain in the accumulation of Tmcel’s problems, taking into account that it seems not to be interested in paying the debts that it has accumulated in recent years. It is generally believed that if the state paid the approximately one billion meticais it owes, it would greatly help the company to deal with the accounts it has with third parties.

LAM heavily indebted

With regard to the national flagship airline, Linhas Aéreas de Moçambique (LAM), the minister indicated that it is gradually getting back on its feet. The worrying issue regarding LAM is that the company is managing a large debt burden.

That is, even with satisfactory operating results, the company’s difficulties regarding debt service management would prevail.

“The big problem is the financial result,” Magala said. “We have a lot of debt that we have to settle in order to be able to produce, but we will be able to do that. Revenue is rising because there is cost control. We are not at the optimal point, where we would like to be, so we will continue with the reforms.”

In the last financial year, the company managed to reach an operational service of 54 million meticais, he concluded.

Source: MediaFax