Cut your overheads or perish, Celtel boss tells TTCL
 
2005-07-07 09:47:45
By Emmanuel Kihaule

	Celtel International Chief Operations Officer Omar Issa addresses a news conference in Dar es Salaam yesterday. With him are the TTCL CEO, George Mbowe, and Celtel Tanzania Managing Director Steve Torode.(Photo: Selemani Mpochi)

The financial woes of Tanzania Telecommunications Company Limited (TTCL) are likely to take a turn for the worse unless immediate steps are taken to cut down the firm’s overheads, Celtel International Operations Officer, Omar Issa, has said.

Issa made the remarks at a press conference in Dar es Salaam yesterday to shed light on the recent move to divorce TTCL from Celtel Tanzania.

The two are at present independent business entities after the agreement that enabled the two to operate as an entity lapsed early this year.

Under the agreement, Celtel International owned 65 per cent of shares in TTCL, whereas the government owned the remaining 35 per cent.

’Imagine the total number of Celtel International employees in 13 countries where we operate is far less than that of TTCL in Tanzania alone. This is a financial burden to the company,’ he said.

At present, Celtel International employs about 3,000 workers serving over 2.5 million customers in countries, whereas TTCL, which operates in a single country with less than 200,000 clients, employs 3,400 workers, Issa said.

He warned: ’This is quite unrealistic and it is up to the company to appreciate this fact before taking steps to improve the parastatal’s performance, or be sympathetic to workers and allow it to sink deeper into financial crisis.’

However, he added, the move to separate the two companies would strengthen their financial positions.

’This was the government’s initiative for the interests of both shareholders and their clients and the new structure would further this objective by enabling both companies to focus on their greatest areas of strength,’he pointed out.

Issa told reporters that Celtel International and the government had entered into an agreement under which a total of US$53 million would be invested in both Celtel Tanzania and TTCL.

The agreement requires that TTCL focus its operations on providing a modern backbone infrastructure and broadband data solutions, whereas Celtel Tanzania would focus on mobile business.

It was also agreed that, after divorcing Celtel Tanzania from TTCL, the government would sell its 25 per cent shares in Celtel Tanzania to Celtel International at US$28 million.

The move, Issa said, would enable the government to own 40 per cent of shares in the new Celtel Tanzania and the remaining 60 per cent would be for Celtel International.

• SOURCE: Guardian