Lesotho revokes Vodacom’s operating licence

LESOTHO – The government of Lesotho has informed Vodacom of its decision to revoke the giant telco’s operating licence for flouting its licence conditions.

The decision by the Lesotho Communications Authority (LCA) comes after the regulator imposed what Vodacom called “a staggering” fine of US$ 8 million  on the company for allegedly flouting its licence conditions and for allegedly being in breach of local legislation governing companies.

Vodacom is Lesotho’s biggest mobile operator.

In response, Vodacom Group said statement that it intends to lodge an urgent high court interdict against the LCA assuring its customers in the landlocked Southern Africa country it is business as usual.

“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 licence are both erroneous as a matter of law and public policy. These actions put at risk the country’s telecommunications ecosystem, including financial services platforms such as M-Pesa, and tens of thousands of jobs” said Vodacom Lesotho managing director, Philip Amoateng.

“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 of 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,” added Amoateng.

At the heart of the dispute is an allegation by the LCA that Vodacom Lesotho flouted corporate governance rules by hiring an auditing firm allegedly owned by the sister-in-law of the operator’s chairman, Matjato Moteane.

 Moteane leads a consortium called Sekhametsi that owns 20% of Vodacom Lesotho (Vodacom Group owns the other 80%).

According to an  the article in The Post, a publication based in the capital Maseru, LCA chief executive Mamarame Matela instructed Vodacom Lesotho, in a letter dated 28 September 2020, to pay the equivalent of US$2.4 million of the fine in local currency with the remaining amount suspended for five years, provided the company “does not commit any further contraventions of its regulatory obligations during the said period”.

Lesotho is by far Vodacom Group’s smallest operation with 1.2 million subscribers.

However, the group said that since Vodacom Lesotho launched in 1996, the company has made “significant contributions to the country’s purse, helped bridge the digital divide and introduced programmes that have benefited many of the country’s citizens”.

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