MTN hit with R9.3m fine in Uganda

Cape Town - Africa’s biggest mobile network MTN has been slapped with a Ugandan court order to pay $662 000 (R9.3m) in damages for anti-competitive behaviour.

Fin24 understands that MTN supplied a mobile money transfer company called EzeeMoney with one modem line and over 30 telephone lines on a postpaid basis to help carry out its business.

However, MTN is then said to have changed the contract to a prepaid basis because EzeeMoney didn’t meet the mobile network’s criteria in terms of call volumes.

But Nigerian newspaper Leadership has reported that EzeeMoney accused MTN of cancelling the contract with EzeeMoney after the latter inked an agreement with Yo! Uganda Limited (YUL) to help implement its money transfer service.

EzeeMoney’s partnership with Yo! was also activated after the regulator approved the use of the 7711 SMS code in December 2012 to enable subscriptions for e-money services.

But MTN then cancelled the contract in 2013, reports Leadership. Fin24, though, understands that MTN has argued that it migrated the contract rather than terminating it.

MTN also has a mobile money service in Uganda which resulted in EzeeMoney heading to court to challenge MTN’s action as “restricted and distorted competition”.

The judge also criticised MTN for allegedly coercing mobile money agents not to sell EzeeMoney services, the Leadership reported.

The commercial division of Uganda’s High Court then served judgment on November 6 that ordered MTN to stop the alleged anti-competitive behaviour and pay $662 000 (R9.3m) in damages to EzeeMoney.

MTN spokespeople are not commenting on details of the matter, but the mobile network’s executive for group corporate affairs Chris Maroleng said the company plans to appeal the court decision.

"It is our decision to appeal this decision,” Maroleng told Fin24.

“This matter will be for the courts and we intend to appeal,” Maroleng said.

Fin24 further understands that MTN has argued that Eezymoney is not a licensed communications service provider.

It’s unclear when MTN’s appeal may be heard.

The R9.3m fine in Uganda, though, is just the latest penalty that MTN faces in Africa after Nigeria this year has fined the company $5.2bn (about R74bn) for failing to disconnect 5.2 million unregistered SIM cards in that country.

MTN Uganda increased its subscriber base by 3.4% to 11.5 million, according to the company’s quarterly update for the period ended September 2015.

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