Reprieve for Telecel

HARARE - High Court judge Nicholas Mathonsi has accused the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) of being overzealous in the manner in which it dealt with the cancellation of Telecel operating licence.

Potraz last week gave Telecel, the country’s third largest mobile network provider, 30 days to round up its operations after withdrawing its operating licence.

This prompted Telecel to approach the High Court seeking an urgent interdict suspending the cancellation of its licence and the 30-day period prescribed for it to wind up its operations.

Mathonsi yesterday granted the provisional request.

“It is apparent that the first respondent (Potraz) acted overzealously…and without due regard to the rights of stakeholders in this matter,” Mathonsi said.

He said Potraz issued a regulatory order without having due regard of Telecel’s rights.

In its cancellation statement, Potraz said, “During this period, it is expected that Telecel Zimbabwe subscribers switch to alternative networks and those with credits on the TeleCash mobile money platform would make good their position.”

This comes as Telecel — owned by VimpelCom’s Cairo-based unit Global Telecom Holdings SAE — has been working with the government to resolve a dispute after Information Communication Technology minister Supa Mandiwanzira said the company had not made licence fee payments and failed to comply with the nation’s indigenisation regulations.

The company has since 2013 failed to pay a $137, 5 million fee to renew its 20-year licence. The government had previously threatened to switch off the carrier.

Telecel’s lawyer Firoz Girach yesterday told the court that the decision to cancel his client’s licence was done without considering the lives of over 700 workers, who stand to be negatively affected by the decision.

“The action taken here must be seen as irresponsible,” he said, adding that the regulatory order was “wrongful and unlawful”.

He said the mobile company had a right to appeal and get protection of its property.

Girach said Potraz’s actions were surprising considering that they were paying tens of millions in taxes.

“The balance of convenience must favour the applicant,” he said.

Among other issues, Potraz accused Telecel of failing to comply with the Indigenisation Act, which stipulates that it should surrender 49 percent of its shares to locals.

Girach said the charge was defective considering that when Telecel was given a licence back in 2002, there were no indigenisation laws.

His argument was buttressed by one of the respondents, Empowerment Corporation (Private) Limited, which was represented by Gerald Mlotshwa. The firm, which owns 40 percent shareholding in Telecel, said it was not Potraz’s duty to make a follow up on indigenisation issues.

Mlotshwa said Potraz was not entitled to enforce the indigenisation policy.

“It is the minister responsible who initiates steps for the cancellation of operating licence for want of compliance with the Act,” he said.

While the Technology minister and the chief secretary in the president’s office, who were represented by Chifarai Dube, did not oppose the application, Potraz through its lawyer James Muzangaza insisted the request was not urgent.

Muzangaza said Telecel had not treated the matter as urgent, a factor that could not find favour with Mathonsi.

Mathonsi queried the reasonability of Potraz’s 30-day winding-up period, considering the fact that the mobile company had a right to appeal within 28 days.

Comments (6)

Smack in the face of Potraz. One wonder if these guys at Potraz have a legal adviser?? How can you miss a simple point of a 28 day right to appeal as enshrined in the law of the land. It shows someone somewhere wanted to take over Telecel clients and declare dividends!!!

Garikayi - 9 May 2015

Instead of closing operations they should be supported financially. The 20 year lease can be paid in installments spread over the 20 yr period. We need players in the telecoms industry, we cannot at this time shoot down any of these players without finding ourselves under a monopoly. Long live Telecel

John - 9 May 2015

what if the minister is quoting another investor (say MTN ) and wants it to partner with a local telecomms company (say telone) and the minister has been given a kickback say $5mil like the case of Masimirembwa. Then the minister will do everything in his power to coerce telecel into accepting the dubious conditions spelt out in the indigenisation laws. Inga wani they said ,it is now industry specific?

Big Meech Larry Hoover - 11 May 2015

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