Vodacom wins first round in big Lesotho battle

Business Insider SA
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  • Vodacom says the high court in Lesotho granted it an interdict against the local authority’s decision to revoke its licence.
  • It accuses Vodacom of appointing an auditor that has a family connection to its chairperson.
  • Vodacom has also been fined millions.
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Vodacom has won a round in its battle against the Lesotho regulator which revoked its licence on Thursday.

The Lesotho Communication Authority (LCA) said it stripped Vodacom of its licence for not paying a fine of more than R40 million.

But Vodacom confirmed on Saturday night that the high court of Lesotho granted an interim order interdicting the Lesotho Communications Authority from revoking the company’s licence.

The court also granted an interdict against the LCA’s enforcing the payment of the fine it imposed on Vodacom.

In terms of the court order, the LCA must on 23 October show cause why the interim order should not be made final order of the court, a Vodacom spokesperson confirmed to Business Insider.

“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. In other words, it remains business as usual for all our valued customers.”

In a strongly worded statement in Sesotho, the LCA last week accused Vodacom Lesotho of breaking governance rules by appointing an auditing firm associated with the sister-in-law of its chairperson, Matjato Moteane, to audit its accounts – which, the LCA pointed out, included the Lesotho community’s money, which flows through Vodacom’s payment system M-Pesa.

The LCA said that Vodacom showed “stubbornness” and “pride” after being confronted about this supposed breach, and accused it of trying to hold the nation at ransom because of its control of telecommunication in Lesotho.

It fined Vodacom R134 million, with 70% of the fine suspended as long as Vodacom comply with the licensing rules in future.

Vodacom Lesotho managing director Philip Amoateng accused the LCA of showing “hostility” towards Vodacom.

Vodacom Lesotho was launched in 1996, and has 1.2 million clients.

Vodacom has been clashing with the LCA for some time, reports The Post in Lesotho. The main source of contention is apparently how much the mobile company owed the LCA in annual fees, which are calculated as a percentage of the company’s net operating income.

According to the publication, Vodacom does not consider its income from its mobile payment platform Mpesa as part of its income for purposes of calculation, while the LCA objects to this approach.

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