Mozambique Weighs Selling Part of Its Stake in Telecom Operator Tmcel

Mozambique · TELECOMS

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. Cabinet spokesperson 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 currently holds about 66% of Tmcel, according to the latest reporting. No percentage for the planned divestment was announced, and no investor names or closing date were given.

The decision marks a shift from earlier, more dramatic rescue plans that included a strategic multinational partner, state assumption of debt, and a workforce cut of around 60%. Government advisers had concluded that bringing in a strategic partner would require selling at least 80% of the company, with the state taking over debt and loans.

A balance sheet under water

Tmcel has been struggling with financial and operational difficulties for several years. One business report says the operator lost MZN 4.44 billion in 2024, after a MZN 2.13 billion loss in 2023.

The same report said 2024 liabilities of MZN 37.94 billion exceeded assets of MZN 23.38 billion, leaving negative equity of MZN 14.56 billion. Tmcel’s debt was reported at more than US$400 million in 2023 government discussions, with later reporting repeating that figure as the company’s liabilities worsened.

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 approved the merger in July 2016, Tmcel was only formally incorporated on 26 December 2018 and began operations on 2 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. The government later transferred day-to-day running of the operator to IGEPE while a management commission was prepared.

Tmcel has also reportedly begun selling assets by auction, including vehicles and other equipment, as part of a wider asset disposal process. The operator estimated it needed US$350 million to modernise and expand its network and launch 4G/5G services competitively against Vodacom and Movitel.

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 notes that many parastatals remain politically sensitive and that privatisation progress has been slow. In 2025, the government considered privatising the ailing airline LAM, then decided to keep it under public control by selling 91% of its shares to other state-owned firms instead.

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 was reported to be increasing its control in telecom-related Mozambican assets, including purchases of stakes previously held by Tmcel in TV Cabo and Televisa.

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

How much of Tmcel does the Mozambican state own?

The state currently holds about 66% of Tmcel, according to the latest reporting.

How much money did Tmcel lose in 2024?

Tmcel lost MZN 4.44 billion in 2024, after a MZN 2.13 billion loss in 2023, according to one business report.

Has Mozambique named a buyer for the Tmcel stake?

No investor names, no percentage for the planned divestment, and no closing date have been announced.

Sources

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