Mozambique: Tmcel loss more than halves in 2023

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Mozambique: Tmcel loss more than halves in 2023

3:18 CAT | 12 Aug 2024

File photo: Integrity

The Mozambican state-owned telecommunications operator Tmcel reduced its losses by more than half in 2023, closing the year with a negative net result of just 2,130 million meticais (€30.5 million).

According to the company’s 2023 report and accounts, to which Lusa had access today, the operator had registered losses of almost 4,333 million meticais (€62.1 million) in 2022, and ended last year with 1,842,679 active customers on the mobile network and 27,466 on the fixed (landline) network.

The report recalled that the state, as the majority shareholder with 92% of share capital, represented by the Institute for the Management of State Holdings (IGEPE), “intervened” in Tmcel in March 2023, “with a view to improving its performance”, putting forward a Revitalization Plan, approved two months later.

“With the implementation of the Revitalization Plan, the company is beginning to show signs of improvement in its performance, and it is expected, in particular, with the completion of the projects included in the pillars of operations and business support systems, which are expected to be completed in July/August 2024, that the indicators will evolve significantly,” the report and accounts states.

In terms of earnings before interest, depreciation and taxes, the operator, one of three in the country’s mobile telecommunications sector, even achieved a positive record of 1,232 million meticais (€17.6 million), compared to a loss of 1,414 million meticais (€20.3 million) in 2022.

“Despite the company’s negative net situation, resulting from the high level of debt and accumulation of losses in recent years, the ongoing actions, with the involvement of the majority shareholder, not only guarantee the continuity of the company’s operations, but also mark the beginning of a new cycle,” the document adds.

Nevertheless, on December 31, Tmcel had negative equity of more than 10,122 million meticais (€145 million euros), resulting from accumulated results from previous years, and liabilities of 37,925 million meticais (€543.7 million), which exceeds total assets of 27,802 million meticais (€398.6 million).

Mozambique Telecom (Tmcel) was established in December, 2018, through the merger of the now-defunct Telecomunicações de Moçambique (TDM) and Moçambique Celular (Mcel), to “create a single, competitive and sustainable entity in the market”, the document indicated.

At the time of its establishment, Tmcel – whose share capital is still 8% held by former employees of the two now defunct companies – had a workforce of 2,054 employees. By 2022, this number had already fallen to 1,476, with the operator closing 2023 with a total of 1,370 employees.

By the end of 2023, as a result of the implementation of the second phase of the network modernization and expansion project, which began in January, 2022, the operator reported that a total of 966 sites (transmission antennas) had been “modernized and/or activated” (478 in the whole of last year), out of the 1,077 planned until the completion of the project.

In September last year, the chairman of Tmcel’s management committee, Mahomed Adamo Mussá, said in Maputo that the Mozambican state-owned telecommunications company was undergoing a “new rebirth”, as part of the revitalization of operations, budgeted at 132 million dollars (€121 million).

“The first two months were spent drawing up an 18-month plan to turn the company’s situation around (…) That’s what we’re going to do: a new rebirth,” Mussá said.

The administration reported growth in several indicators with the inclusion of new products, as a result of the telecommunications network expansion and modernization project, financed by China’s Eximbank.

Also within the scope of the network modernization and expansion, which began in January 2022, after “almost ten years without investment”, Tmcel, which operates a support network of 7,600 kilometres of fibre optics and 8,500 kilometres of access networks, had already increased broadband coverage from 10 to 400 gigabits per second (Gbps) in 2023, and has global national coverage via its 4.5G mobile network.

Source: Lusa