Rwanda fines MTN Rwanda USD8.5 million

MTN

MTN Group might have another problem on its hands as MTN Rwanda has just been slammed fine totaling up to USD8.5 million.

According to Thomson Reuters, MTN Group, the South Africa-based company had acknowledged receipt of fine notification from Rwanda utilities regulatory authority.

The company’s Rwandan unit, MTN Rwanda confirmed that it has received official notification of a fine equivalent to USD8,5 million from Rwanda utilities regulatory authority (RURA).

The company is being fined for non-compliance with directives issued by regulator prohibiting inclusion of MTN Rwanda in MTN South and East Africa (sea) it hub based in Uganda.

A spokesperson for the Rwandan telecom regulator, Anthony Kulamba said “They are punished for relocating their IT services outside Rwanda, and this was deliberate.”

The statement of RURA reads below:

The Rwanda Utilities Regulatory Authority (RURA) announces administrative sanctions imposed on MTN Rwanda Ltd for non-compliance with its license obligations.

MTN Rwanda Ltd provided services in contravention of Enforcement Notice and Directives issued by the Regulator against hosting its IT services outside the country.

By doing so, MTN Rwanda breached its license obligation requiring it to comply with all applicable laws, regulations and any other regulatory instruments issued by the competent authority.

On 4th May 2017, the Regulatory Board of RURA conducted a hearing session in which MTN Rwanda Ltd was informed on (sic) the breach of its license obligations and given the opportunity to be heard, whereby MTN Rwanda Ltd admitted the above mentioned breach.

In accordance with the applicable laws, the Regulatory Board of RURA decided to impose on MTN Rwanda Ltd administrative fine of seven billion thirty million Rwanda Francs (7,030,000,000).

MTN Rwanda said it is currently studying official notification and will continue to engage with the regulator on this matter. The company also disclosed that it has been engaging with the regulator on the matter over past four months.

It would be recalled that Nigeria has fined MTN Nigeria, the company’s local unit in Africa’s largest economy for non-compliance with SIM registration policy of the telecom regulator, NCC.

MTN Nigeria is still grappling to pay the NGN330 billion fine. The fine has deeply affected its bottom line across the group. Last year, MTN Group declared its first ever full-year loss.

Apart from the attendant loss of revenue used to pay fines, MTN Nigeria has also lost significant parts of its subscribers base. In its 2017 first quarter result, the group disclosed that it might have lost about 1.4 million subscribers as a result of lower promotions within the year and a tough recession that ravaged Nigeria’s economy since the first quarter of 2016.

It is not clear if MTN Rwanda will be negotiating the fine just as MTN Group did in Nigeria. The fine is expected to affect the company’s bottom line. MTN has the largest market share in Rwanda with 4 million subscribers. MTN Group owns 80% of the company, the remaining 20% is owned by local investors with listing on the Rwanda Securities Exchange.