HOW ANTHONY KATAMBA DELIVERED MTN AT UCC MON PUBLIC HEARING
By John V Sserwaniko
On Monday the much awaited day for the MTN top management to face the public came and passed like any other. The team of MTN top executives was led by CEO Wim Vanhelleputte and things didn’t come off as complicated for them as had widely been expected. Many of the inquisitive scribes at the meeting wondered to themselves what happened to outspoken pundits who in the preceding days and weeks had appeared on radio and TV talks saying many nasty things about MTN. Most notoriously was a group famously known as WASP. Because it was widely expected they would make a strong case against MTN, the moderator called out their name first when it was time for questions from the audience after the MTN CEO was done with his presentation making a case why they deserve a 10 year extension. It unexpectedly turned out there was no WASP representative. Organizers took guests for the tea break hoping WASP and others had only been delayed. They were wrong because even on return, none of such guys previously expected to speak very notoriously against the MTN was anywhere to be seen. Godfrey Mutabazi, the CEO of the regulator UCC in whose board room the meeting occurred, was conspicuously absent but was ably represented by Director Corporate Affairs Fred Otunnu and Director Legal Affairs Susan Wegoye who went through the UCC report evaluative of the MTN and clearly pointed out areas where the South African company had fallen short promising severe sanctions.
Otunnu ably conducted all the sessions at the public hearing where Vanhelleputte counted on his equally able General Manager Corporate Services Anthony Katamba whose decisive answers silenced (in fact bullied into silence) some of the guys who had spoken with a lot of anger. As we shall show subsequently in this story, Katamba, making use of the equally cautious manner in which Otunnu conducted the hearing sessions, knew what to say and not to say as well as which questions to answer and which ones to skip.
He often referred to matters pending before court where some of the guys asking had dragged MTN for judicial remedies. But all in all, the audience wasn’t as hostile as many of us had initially expected. In fact you had people like ICT innovator Kamanzi and Radio City GM Kevin Masaba openly being very defensive of MTN wondering why UCC was delaying to renew its license. Some in the audience looked puzzled, at some point, seeing people from the audience praising MTN. Otunnu quickly noticed this and got to the microphone to say, being a public hearing, organizers expected both positive and negative comments. He categorically explained it wasn’t improper or a breach for anyone to sing MTN praises at the hearing. As he made this point, Katamba, Vanhelleputte and other MTN top executives present wore broad smiles with some sipping on their mineral water.
NOT TOTALLY FREE;
This isn’t to mean things were entirely smooth for the MTN top gurus at the modestly attended public hearing. From the modest audience were guys (though not very many) who nevertheless made stinging criticisms of the telecom giant. For purposes of this article we shall reflect on a few including former UBC MD (now private businessman) Paul Kihika who implored UCC not to renew MTN license for another 10 years and gave his reasons. He said MTN hadn’t been transparent while declaring its incomes for taxing purposes and referred to the many times court has had to decide its disputes with URA. As MTN officials uneasily turned in their seats, Kihika asked why UCC would even call a meeting to discuss the possibility of renewing operational license for such a very non-compliant business entity. He also faulted MTN for going into things like mobile money transfer services instead of harnessing its core areas namely voice and data services. He said going into such was opening MTN up to many disputes that could otherwise have been avoided; giving the example of content provider SMS Empire. Kihika also referred to the MTN CEO’s earlier presentation in which he said they had divested themselves from the tower management function and surrendered it to the American Tower Company.
Kihika also referred to profit repatriation (critics say as much as over Shs1trn is annually repatriated back to S/Africa) and wondered why MTN wasn’t enthusiastic about floating shares so that native Ugandans can gain ownership stake in the company as shareholders. In what would later infuriate the moderator Otunnu to furiously shut him up, Kihika in the end said: “But anyway we know much as we are here, this is just a formality because the credible information I have is that a decision has already been taken to renew the MTN license on 23rd May.” Insisting this was a very serious matter where gossiping can’t be tolerated, Otunnu demanded that Kihika adduces evidence “because whatever is said here is supposed to guide the Commission when evaluating the application [by MTN seeking to renew their license].” At this point, Kihika (whose submission at some point attracted cheerful support) smiled a bit and resumed his seat. Then came Omar Lwassa, a middle aged man who clearly cut the demeanor of a very angry Ugandan. He was casually dressed and took to the microphone-speaking in a voice deeper than his demeanor resembled. “I come from the Uganda Electronics Dealers Association where I’m vice chairman and PRO,” he said proceeding to make his point as he angrily faced the MTN bosses sitting right infront of him on a table directly opposite where Otunnu and Wegoya were moderating from. Lwassa accused MTN of environmental irresponsibility citing absence of a policy to protect mother-nature against reckless dumping of airtime scratch cards. He said this makes MTN liable for the increasing cancer cases.
He also wondered why UCC wasn’t being hard on MTN regarding the management/disposal of electronic waste e.g. phones whose supposed life span expires. He said there is a relevant desk at UCC but its redundant as such rules are rarely enforced against MTN which he claimed was always favored by UCC. In fact at the start of his submission, fast-talking Lwassa had accused UCC of staging a fake audience to enable MTN walk away with many things. “I would like to ask when is the real public hearing going to take place? Because for me I don’t count this one. When I look around I see only people from MTN and UCC.
We must have the genuine public hearing and tell me when is it going to be organized different from this one of MTN and UCC family,” he said attracted protesting murmurs from the audience. Otunnu, who was all the time holding the microphone as moderator, immediately called Lwassa to order rebuking him as he protestingly walked away from the podium where questions were being asked from. “It’s good you have raised your unsubstantiated questions and answered yourself. You said this is an affair of UCC and MTN family but from which of the two families do you come?” Otunnu authoritatively asked prompting Lwassa to angrily walk back towards the podium to defend himself. However, Otunnu flagged him back. This prompted Lwassa, who was clearly burning in a rage, to angrily storm out of the meeting room and by the time Katamba came to answer his questions, the man was nowhere to be seen.
Before leaving the microphone, Lwassa said MTN is very uncompliant to especially tax obligations and said this a matter he was constantly discussing with the URA’s head compliance. “In fact he is supposed to have been here but I called him this morning and his phone is off.” Even in his absence Otunnu referred to “sweeping statements” and warned subsequent questioners against emulating Lwassa. Godfrey Senyonyi, a writer with Business Summit Magazine, supported Kihika’s point urging MTN to float shares to local Ugandans to mitigate against profit repatriation. Mark Wamala commended MTN for its generous CSR packages but decried profit repatriation. Eng Edward Kasule Musisi, who sits on the Board of the UCC-supervised ICT institute near Mubs, wondered why MTN hadn’t done enough to contribute towards growing strong local cadreship of telecom engineers loudly asking MTN bosses whether they think there are engineers that can run the telecom sector if they were to suddenly quit the Ugandan market the next day. Preceding all these questioners was Peter Magelah Gwayaka, a lawyer working with Nicolas Opio’s Chapter 4.
He accused MTN of violating the law and committing criminal activities as manifested in the unsolicited messages they have been sending to him since 2004 even after he protested several times directly to MTN and also through UCC. “To me the MTN has been the biggest violator of the law and yet UCC has been reluctant to act on my complaints,” he said adding he has been so persistent in his complaints that the UCC management assigned him a one Ibrahim Bbossa to always receive his complaints and update him. He said MTN’s practice to keep deducting his money for messages he never solicited or consented to was a crime contrary to provisions of the Electronic Transactions Act. He also faulted UCC for refusing to protect him as an aggrieved customer under Section 40 of the Communications Act. He claimed if it wasn’t for the UCC’s curious protection, MTN should by now have been fined more than Shs10bn on the strength of his complaints alone-and much more if the complaints of other similar victims were to be acted upon.
He proposed that instead of renewing the license for 10 years, MTN should be given a 6 months period to wind up and go away. Charles Nsamba, from the Capital Markets Authority which handles share issuance, said the MTN license renewal would be good for the economy but localization (floating shares for local people) must be urgently rolled out. “I know as MTN, your shareholders have the money. It’s not what they are looking for because they aren’t lacking it but Ugandans have been very good to you. It’s only fair that you reciprocate by coming up on the USE with a restricted offer so that only Ugandans benefit.” Nsamba said this to counter MTN CEO Wim who had earlier on answered Kihika saying floating shares isn’t a guarantee that Ugandans will get a stake because foreigners can dominate all the shares.
Immediately Katamba took to the microphone and began answering the questions which many MTN officials in the room considered not as hostile as they came expecting. He began by saying much as these are good questions, presumably asked in good faith, many of them wouldn’t be answered. He said this would be repetitive for no good reason because many of the relevant answers had been provided by the MTN management in their comprehensive written response that was already with the UCC as part of the evaluation process for their application. He went straight for Kihika, proudly saying he was surprised the whole ex-UBC MD wasn’t aware some of the URA cases he was referring to had since been decided by court moreover in MTN’s favor.
He said the only URA-related case he was aware of, that is still actively in court, is one where MTN is the complainant protesting having been unfairly (tax) assessed by URA on a previous transaction. Turning to Magelah, whose questions many thought were the most lethal for the MTN team, Katamba deflated everything saying “Mr. Magelah has this very case in the Nakawa High Court and I don’t know why he has decided to raise the same matters here well knowing it’s can’t be discussed since its pending determination by court.” He added: “Besides there is an industry-wide effort to address the issue of unsolicited messages under the supervision of UCC.”
He said in the end, regardless of the way court decides in Magelah’s case, unsolicited messages will continue coming to customers’ phones “because sometimes these are consumer education messages from the operator and most importantly, sometimes there are given to us by government as instructions to send them to citizens say communicating a health alert or an outbreak.” He explained this is part of the licensing conditions-that the operator should always expect being tasked by government to send out such unsolicited messages. On the issue of MTN doing what Kihika called none-core business like Mobile Money, Katamba explained that it’s impossible for MTN to engage in Value Added Services (VAS) without having to operate a mobile money service.
He stressed that the MM is a VAS which UCC encourages for all telecom operators (to operate VAS). He added that mobile money isn’t something on which MTN is competing with anyone because it’s in close partnership with Stanbic and Centenary bank. He said BoU has endorsed this partnership and thereby covering the regulatory concerns anyone would raise against MTN. He said that, besides all that, MTN has no competition with VAS service providers. The UCC bosses were also questioned on the absence of the competition law under which giants like MTN can be sanctioned in case they abuse their dominant market position to engage in unethical practices.
Fred Otunnu immediately shut up this questioner saying even when these are expected to be ordinary members of the public freely asking any questions, the legal doctrine of burden of proof equally applied; that he who alleges [in this case against MTN] must prove. The organizers also didn’t elaborately answer Eng Kasule’s other question regarding reasons why they don’t avail the public an opportunity to scrutinize the MTN’s draft license when it’s finally ready-so that they make comments on it.
Katamba cleverly avoided the question of floating shares and left it for his boss the CEO Wim to answer. “We definitely agree that beyond the 5% shareholding held by Investico, we need to ensure the company becomes more Ugandan by listing on the USE. However, that may not be an end in itself because you can list and still foreigners buy all the shares,” the MTN CEO explained.
He said stock listing is just one of the many ways through which localization (as he called it) can be deepened at MTN “and it’s something we are seriously considering.” But he was reluctant to give clear time lines regarding how soon they intend to implement this. He said localization isn’t alien to the MTN Group “because it’s something we have willingly done in other markets.” In our next article, watch out for reasons likely to influence UCC’s decision in the end to renew the license of MTN, a multi-trillion giant company many have rightly described as too big to fail getting license renewal. For comments, call/text/whatsapp us on 0703164755!