Vodacom and Lesotho government are to lock horns over the mobile operator’s operating licence, which has been revoked by small Southern Africa’s landlocked country.
The Lesotho Communications Authority (LCA) has revoked the unified license.
The authority has imposed a staggering fine of M134 million for Vodacom’s alleged contravention of section 97 of the Companies Act 2011 and certain conditions of its unified license.
Vodacom said in a statement that it would lodge an urgent application in the High Court in Lesotho to have it reviewed and set aside the decisions of the Lesotho Communications Authority.
“We have no option but to seek relief in the courts because the LCA’s decisions imposing an excessive fine as well as the revocation of Vodacom’s operating license are both erroneous as a matter of law and public policy,” said Philip Amoateng, MD of Vodacom Lesotho.
Vodacom Lesotho has 14 days to apply to have the LCA decision imposing the M134 million fine reviewed by the High Court.
Vodacom notified the LCA of its intention to challenge the lawfulness of this decision and was shocked to receive the Notice of Revocation of the Unified License, dated 8 October 2020, in flagrant disregard of the rule of law.
“The LCA has unfortunately violated its prescripts and rules and our efforts to find an amicable solution to the dispute has drawn a complete blank. Given the hostility shown by the LCA towards Vodacom, our options are now limited to seeking redress in the courts to avert further damage to our brand, reputation and the interests of stakeholders, including our customers, shareholders and employees,” adds Amoateng.
Since Vodacom Lesotho launched in 1996, the company has made significant contributions to the fiscus, helped bridge the digital divide and introduced programmes that have benefited many of the country’s citizens.
Examples include a direct and indirect tax contribution over a three-year period alone (financial years 2018 -2020) that is approximately M1 billion and a M2.2 billion investment in providing ubiquitous connectivity to Basotho – with a nationwide network covering 98.5% of the population.
Additionally, Vodacom has spent M85 million since 2016 on corporate social investment, contributing to better healthcare, increased digital skills through initiatives such as “Code like a girl” and supported job creation through incubation of small-scale local business, amongst others.
“These actions put at risk the country’s telecommunications ecosystem, including financial services platforms such as M-Pesa, and tens of thousands of jobs. Through significant investments by Vodacom Lesotho, the country has been at the cutting edge of new technologies having been the first on the continent to launch 5G.,” Amoateng said.
“We assure citizens of Lesotho that we remain fully focussed on delivering great value and a superior customer experience to the 1.2 million people who have chosen us as their network provider of choice and the around 661 000 M-Pesa users who rely on us for inclusive access to financial services.
“As a responsible corporate citizen, Vodacom Lesotho remains committed to complying with regulations and the rule of law and further contributing to the country’s economic recovery in the wake of the global Covid-19 pandemic. Crucially, it remains business as usual for all our customers.”
The Post, a publication based in the capital, Maseru, reported that the fine, whose quantum is unprecedented in Lesotho, will send chills in a telecommunications sector already grappling with the adverse effects of the Covid-19 pandemic.
Along the way, there has been an unconfirmed allegation that some politicians want to push out Vodacom and bring in a new mobile network operator linked to their cronies.
The LCA has however insisted that its only motive is to ensure compliance.
The government has denied the allegation, dismissing it as malicious mischief. Still, that accusation has persisted and is now likely to be spurred on by the latest decision.
In her nine-page letter, Mamarame Matela, the LCA’s chief executive, accused Vodacom of flagrantly violating regulations since 2015 and then denying wrongdoing when the LCA raised the allegations.