FIXED telecommunications service provider, TelOne has retrenched 300 workers since 2014 and will continue to downsize its workforce in a bid to keep its business afloat in the wake of continued decline in voice revenues and other economic challenges.
Responding to e-mailed questions, TelOne managing director Mrs Chipo Mutasa said the downsizing of the company’s workforce was of a rationalisation strategy it embarked on three years ago aimed at optimising operation, improving customer service while driving towards sustainability and profitability.
“TelOne has been rationalising its business since 2014 from different perspectives as part of our drive to improve our customer experience and long-term sustainability and profitability. As part of the rationalisation, specific attention has been given to strategic realignment where the company is being transformed from a purely fixed business to a fixed mobile converged business anchored on broadband and data services,” said Mrs Mutasa.
The company is in the process of unbundling into three distinct business units and organisational structure re-alignment to suit the needs of the new business thrust.
“The structure re-alignment entails re-assigning skills to areas of competence, a process that is almost complete. Cost rationalisation has also been a major focus area where a raft of measures ranging from salary cuts, operational cost reduction and discount negotiations with suppliers have also been implemented in the last three years,” said Mrs Mutasa.
Over the last three years the telecommunications service provider has retrenched over 300 workers. Currently the company employs 1 929 permanent and fixed term contract employees.
“Our strategy has been that of encouraging voluntary early retirement. Natural attrition among other causes accounts for five percent of our annual staff reduction. In the past three years, we have managed to reduce our staff by over 300 through this model,” said Mrs Mutasa.
TelOne made a loss of $24,9 million in 2016, the company’s annual financial results reveal. The results show that the company is burdened mostly by loans from a long time ago when it was still Posts and Telecommunications Communications (PTC).
Those loans amount to $231 million and they brought with them costs of $19,3 million in the year.
“Legacy loans amounting to $364 million have continued to weigh-down our balance sheet. Efforts have been made to have Government to warehouse the loan to enable the company to raise fresh capital to invest in the business,” said Mrs Mutasa.
However, Mrs Mutasa said since 2013 business has been progressing steadily as a result of the company’s business strategy realignment, network modernisation and new network deployment in Greenfield areas, systems optimisation and staff culture change, only to experience a slump last year.
“Short-term benefits saw TelOne registering operating profits for three consecutive years up to 2015. However, the significant decline in voice revenues of over 30 percent due to Over-The-Top services which has been affecting telecoms players the world over have not spared the company.
“This has seen us moving to strengthen the broadband business which in 2016 witnessed a positive growth of 18 percent to become the major driver of the TelOne revenue matrix. The target is to have broadband and data services contributing 56 percent of our revenue up from the current 36 percent with voice taking 44 percent down from the current 66 percent,” she said.
Mrs Mutasa said the company was in the process of introducing a number of modern telecommunications services and packages.
“With the network modernisation that we are deploying, several exciting capabilities are coming on-board which include the new state-of-the-art data centre, prepaid billing among others. We have also lined up several value added services, which we will be availing to the market in due course.
“We are also excited to be announcing the establishment of a fully-fledged Innovations Department which will be exploring new ideas to ensure that TelOne is up-to speed and ahead of our competition. Several ideas are already brewing and we are confident we will be exciting the market soon,” she said.
Mrs Mutasa said its fibre optic link from Bulawayo to Beitbridge was nearing completion.
“The 300km Bulawayo-Beitbridge backbone fibre project is nearing completion and is expected to be commissioned within the third quarter. Once completed, we are expecting to significantly cut our bandwidth landing cost significantly and this will also be passed on to our customers thus reducing the cost of Internet,” she said.