Mozambique mobile operator Moçambique Telecom (Tmcel) is reportedly on the verge of collapse.

The state-owned company, which offers fixed and mobile services, could collapse unless urgent action is taken to shore up its business, warned Mozambique’s Minister of Transport and Communications Mateus Magala.

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The comments made by Magala were first reported by local publication Lusa, which referred to Mozambique Airlines (LAM) as also being close to collapse.

In the article, Magala notes that Tmcel has 'lost the capacity to honor its commitments, including not paying salaries to its many workers, and has an overall accumulated debt of over $400 million, with a tendency to worsen.’

The government has advised the sale of over 80 percent of Tmcel's assets, plus the reduction of its workforce and the assumption of debt to the state, ahead of attracting a strategic partner to push the company's recovery.

Last month, it was reported that the day-to-day running of the operator was transferred to its 90 percent shareholder, the state asset management agency Instituto de Gestao das Participacoes do Estado (IGEPE).

Tmcel is the third biggest operator in the country behind Vodacom and Movitel and is estimated to have around 13 percent market share, with fewer than three million subscribers.