Mobile phone licence battles rage in Malawi

By Gregory Gondwe, Blantyre, Malawi

The Government of Malawi this week engaged in yet more battles with new telecommunications companies that failed to roll out as prescribed in their licences.

The latest court battle happened on Tuesday this week when the Supreme Court of Appeal ruled in favour of the Malawi Communication Regulatory Authority (Macra) when Malawi Mobile Limited, which failed to roll out, sued it for US$132 million in damages.

This came hot on the heels of another case this week, where Macra warned Celcom Limited, a wholly-owned Malawian telecommunications company, that Macra awarded a fourth mobile-phone operating licence in 2011 that it risks losing its licence if it fails to roll out within the next four months.

It has also opened an internal battle over who can be given a licence from a list of six companies that sent their bids in 2008.

Malawi Mobile Company took government and Macra to court after it revoked its licence.

The Supreme Court heard in January this year that MACRA gave Malawi Mobile a telecommunication licence that stipulated that the licensee should roll out until the year 2005. In February 2005 Macra issued a notice that it would cancel the license in 90 days. However, Malawi Mobile asked for an extension till October of the same year.

Macra board met and agreed to extend the licence but government dissolved the board before it executed its resolution. It was alleged that the then Macra Board Chairperson, the late Abdul Pillanie, who chaired the dissolved board handed over the half signed agreement to the company’s lawyer who in turn sent it to his client’s head office in South Africa.

Using the controversial agreement, Malawi Mobile then sued Macra and Government demanding US$64 million and the High Court ruled in favour of the company. Government appealed against the judgement.

When the matter was taken to the Supreme Court of Appeal MMC hiked the amount to US$132 million claiming loss of business however presiding Supreme Court judges Andrew Nyirenda, Edward Twea and Richard Chinangwa overturned the ruling.

After the ruling on Tuesday, on Wednesday this week the company wrote the Attorney General that they will be taking the matter to Comesa Court of Justice.

A letter written by the company’s lawyer David Kanyenda dated March 11, 2015 says the company is aggrieved by the judgement.

“Our client shall refer this matter or dispute to the Comesa Court of Justice since our client is aggrieved and or dissatisfied with the whole judgement of the Supreme Court of Appeal.

He said in due course they shall serve the attorney general with requisite documents and court process in respect of the referral to the Comesa court.

The Attorney General has however doubted if the Comesa court has the jurisdiction to preside over such a matter.

In May 2013 Macra won the final stage in cancelling the third mobile operator licence it had awarded to G Mobile.

The company was granted a licence in April 2009, and was due to have launched its network within a year. The licence was finally cancelled in September 2010 following several deadline extensions, but the company appealed to the courts.

The High Court upheld the appeal, but this has now been overturned by the Supreme Court.

The company had tried to argue that it was denied the right to economic activity by the regulator, but the court found that the regulator had not breached the law in cancelling the licence following repeated failures to launch the mobile network.

And this week Macra has said Celcom which fought off competition from three companies; Zambezi Africa Telecom; C-Mobile Holdings Limited and Smart Telecom Limited – for Malawi’s first technology-neutral license risk losing its licence.

According to Macra Communications Officer, Clara Mulonya, Celcom was granted a licence on April 29, 2011 to provide public telecommunication services in Malawi and as per the licence terms and conditions; it was expected to roll-out its services within 18 months from the effective date of the licence.

She said the 18 months expired on October 28, 2012 by which time Celcom had not managed to provide the services as stipulated in the licence.

She however said Celcom applied for an extension of the roll-out period citing a number of justifications for the above stated failure which compelled Macra to extend the period on two occasions bringing the total period of roll-out extension to 28th July 2015.

She said in this regard, Celcom is expected to roll-out its services on or before 28th July 2015 under specific roll-out extension obligations failing which the license stands to be revoked under the Network Roll-out Extension Agreement and clause 27 of their licence.

“Macra is continuing monitoring Celcom progress with respect to the agreement and will communicate accordingly at the end of the agreed extension period,” she said.

At the moment the Macra board is also embroidered in controversy over six bids of companies in an international tender process expressing interest to have a mobile telephone operating licence in 2008.

Of the six companies Milcom was scored highly by the board with 90.5 percent, followed by Expresso Telecom Group of Dubai which scored 82 percent, VivaCell MTS Consortium from British Virgin Islands at 81 percent, Lebanon-based multi-national telecommunication provider Comium Group at 75 percent, while Lacell of Singapore as well as Forward Ranchers each got 60 percent rating.

The controversy has now ensued following revelations that the board is considering awarding a licence to Lacell, which uses the brand name Smart Mobile, despite scoring lowly.

Macra Director General Andrew Kumbatira and Minister of Information Kondwani Nankhumwa have however backed the choice of Lacell.

The minister said the new board would like to “renegotiate” with Lacell on terms and conditions of licensing.

Kumbatira said based on current information Macra has, this is the right firm considering that other frontrunners were either disqualified or pulled out.

At the moment Malawi has two established mobile phone network service providers, Airtel Malawi and Telecoms Networks of Malawi (TNM).

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