Mobile network giant Vodacom Lesotho says it will lodge an urgent application in the High Court of Lesotho to have reviewed and set aside the decisions of the Lesotho Communications Authority (LCA), imposing a fine for a staggering sum of M134 million for alleged contraventions of section 97 of the Companies Act, 2011 and certain conditions of its unified license.
In the same application, Vodacom will be challenging the lawfulness of the LCA’s decision, set out in a notice dated 8 October 2020, revoking its unified licence.
Commenting on Vodacom Lesotho’s decision to approach the High Court, Philip Amoateng, MD of Vodacom Lesotho, said: “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.”
In accordance with Rule 50 (3) of the LCA’s Administrative Rules of 2016, 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 M1billion and a M2.2billion investment in providing ubiquitous connectivity to Basotho – with a nationwide network covering 98.5 percent 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. We assure citizens of Lesotho that we remain fully focused 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,” concludes Amoateng.
The Lesotho Communications Authority (LCA) yesterday issued a statement announcing the revocation of Vodacom Lesotho’s license for failing to comply with a directive to pay a penalty of M40 200 000 by end of business yesterday.
On Monday this week, LCA promised it would revoke Vodacom’s license but would instead impose a penalty of M134million of which Vodacom had to pay 30 percent of the fine – M40million – immediately, with the rest suspended for five years.
LCA says the revocation of the Unified license of Vodacom is in accordance with section 47(1)(e) of the communication Act 2012 read with conditions 7(c) and 8 of the terms of Licence for failure to comply with the directive to pay the said penalty.
