Mozambique Weighs Selling Part of Its Stake in Telecom Operator Tmcel

Mozambique · TELECOMS

Mozambique is moving toward a partial Tmcel stake sale, authorising negotiations to bring a private investor into the loss-making state telecom operator without yet revealing how much control Maputo is willing to give up.

Cabinet opens the door to a Tmcel stake sale

On 11 August 2026, Mozambique’s cabinet authorised a technical team to negotiate the possible sale of part of the state’s shareholding in Tmcel, the country’s historic telecom operator. Government spokesperson and State Administration Minister Inocêncio Impissa said the state may divest shares or transfer them to a third party to give the company greater dynamism and help recapitalise and revitalise it.

The government holds about 66% of Tmcel directly, with the state asset institute IGEPE holding a further 26% and former employees of the two predecessor companies the remaining 8%. No percentage for the planned divestment was announced, and no investor names or closing date were given.

Tmcel closed 2024 with 841,171 active mobile customers and 25,363 fixed lines, a distant third behind Vodacom and Movitel. Its headcount had fallen to 1,334, from 2,054 when the company was founded.

The decision marks a shift from earlier, more dramatic rescue plans. Mateus Magala, then minister of transport and communications, said the preferred fix would be a multinational strategic partner, involving the sale of 80% of Tmcel’s shares, the state absorbing all of the company’s debt, and a 60% cut to the workforce.

A balance sheet under water

Tmcel has been struggling with financial and operational difficulties for several years. Its audited annual report, as reported by Lusa, shows a loss of MZN 4.44 billion, about €59.7 million, in 2024, after MZN 2.13 billion in 2023.

The same accounts show 2024 liabilities of MZN 37.94 billion against assets of MZN 23.38 billion, leaving negative equity of MZN 14.56 billion. In 2023 Tmcel’s total debt reached about US$400 million and the company was unable to pay the wages of its 1,700 staff, according to state news agency AIM.

There is one countervailing sign. Mozambique’s finance ministry reported that Tmcel cut its external debt by 4.93% in the first quarter of 2026, one of several state firms whose debt fell.

Tmcel was created by the merger of Telecomunicações de Moçambique and Mcel to rescue both from the verge of bankruptcy and unsustainable debt. Although the Council of Ministers decided on the merger in the second half of 2016, Tmcel was only formally incorporated on 26 December 2018 and began operating in January 2019.

State intervention has not stopped the slide

By March 2023, the state asset manager IGEPE had intervened in Tmcel with a view to improving its performance, and a revitalisation plan had been approved two months later. In 2023 the government put day-to-day management of the operator in IGEPE’s hands while a management commission was appointed, reporting to a Tmcel Transformation Council made up of two ministers and the head of IGEPE.

Tmcel has also reportedly begun selling assets by auction, including vehicles and other equipment, as part of a wider asset disposal process. Around 2020 Tmcel’s then chairman, Mohamed Rafique Jusob, put the cost of modernising and expanding the network and launching 4G and 5G at about US$350 million over five years, of which US$200 million had been secured.

No updated figure has been published.

The state’s reluctance to keep funding a chronically loss-making firm is explicit in commentary that the government is cash-strapped and has little reason to continue underwriting Tmcel without outside capital. The Tmcel stake sale is therefore being framed as a classic state-owned enterprise bailout problem: a politically sensitive company with weak cash generation, heavy debt, and an urgent need for capital.

A pattern of cautious state retreat

Mozambique’s government has been under pressure to restructure state-linked firms, and the U.S. State Department’s Investment Climate Statement notes that while the privatisation programme has been relatively transparent, most remaining parastatals are state-controlled public utilities, which makes privatising them more politically sensitive. In February 2025 the government authorised the sale of 91% of the ailing airline LAM, valued at about US$130 million, but only to three other state-owned firms, keeping it under public control.

That pattern suggests a recurring Mozambican policy choice: preserve political control, but recycle assets among state institutions when outright private privatisation looks too risky. The Tmcel case therefore sits at the intersection of fiscal stress, state-owned enterprise reform, and elite control of strategic assets.

The telecom sector is already being reconfigured through partial divestments and private-sector consolidation. In February 2026, Bayobab and Tmcel announced a strategic partnership to strengthen Mozambique’s international connectivity, while in July 2026 the Portuguese group Visabeira notified Mozambique’s competition regulator of deals to lift its stakes in TV Cabo Moçambique and Televisa from 50% to 80% by buying Tmcel’s 30% holdings in each.

The regulator opened a public consultation and the transactions still require clearance.

Strategic value beyond the balance sheet

Mozambique’s location gives it outsized geopolitical importance because of the Mozambique Channel and its role in Indian Ocean connectivity, energy flows, and regional security. The country is also a target for foreign capital and state-linked partnerships in infrastructure and telecoms, which gives telecom assets extra strategic value beyond their balance sheets.

The broader Mozambican political economy has long been shaped by external financing, donor influence, and privatisation pressures, especially since the reforms of the 1990s. Any new Tmcel investor would likely matter not just as a commercial partner but as a node in Mozambique’s network of external relationships, especially with Portuguese, Gulf, Chinese, and other international capital providers active across the region.

This dynamic fits the wider pattern covered in Africa: The New Scramble, where strategic assets in Southern Africa are increasingly contested by competing external partners. The Tmcel stake sale is a test case for whether Maputo can attract capital without surrendering strategic control of a company that remains important for employment, state prestige, and national connectivity.

What to watch next

The technical team authorised on 11 August 2026 has not yet disclosed the size of the slice to be sold, the buyer shortlist, or the timetable. The key question is whether this becomes a genuine restructuring with private capital and governance reform, or another Mozambican compromise in which the state socialises losses while selectively privatising revenue-bearing assets.

Investors will watch for signals on how much debt the state is willing to absorb and which foreign or domestic investor is politically acceptable. The outcome will shape expectations for other state-owned enterprises under fiscal pressure in Mozambique.

For now, the Tmcel stake sale remains a negotiation without a number, a buyer, or a date. But the direction of travel is clear: Maputo is looking for outside capital, and telecom is one of the first places it is testing how far it can go.

Frequently asked questions

Sources

• AIM — Technical team to negotiate sale of state stake in Tmcel (12 Aug 2026)
• Lusa via Jornal Económico (11 Aug 2026)
• Lusa — Tmcel losses in 2024 (18 Jul 2025)
• Bayobab — Tmcel partnership (10 Feb 2026)
• ECO — Visabeira raises Mozambique telecom stakes (16 Jul 2026)

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