HOW MTN LOST M7 FAVOR
By Mulengera Reporters
Secrets have emerged detailing circumstances under which top executives at MTN Uganda gradually lost favor of President Museveni and State House. Sources say that regular bribes to influential officials made MTN bosses to become indifferent having concluded that almost everyone in Museveni’s government had a price. Sometime last year, there was panic when incorruptible Frank Kaka-led ISO raided the MTN facility in Mutundwe. The 2nd July raid came up for intense discussion during the MTN top management meeting and everybody was wondering how to overcome Kaka. “Our budget for managing such nosy government officials is still intact. Leave that one to me. I will handle him like all the others,” one of the official MTN power brokers told colleagues during that crisis meeting. Unknown to the official, Kaka turned out too Musevenist to compromise. In fact the relentless Kaka efforts to clamp the MTN wings gradually demistified this showy MTN official who previously cut the figure of a Mr. Fix it of sorts. The same official was to further be demistified when his promise to use his State House connections to get the President’s nod for the MTN license didn’t yield much. “Group headquarters in South Africa always trusted him than even the CEO but this loud failure to move Museveni on the license issue led to the realization that actually there was a limit to how far Mr. Fix it could go,” says a knowledgeable insider. The same insider says that in his heydays, Mr. Fix it often bypassed the CEO and got instructions directly from SA. “Because of his exaggerated political connections alot of money would be authorized for him to spend without accountability. It was always categrized as classiffied expenditure paid out to bribe politicians and generally finance NRM political campaigns in return for political patronage. What mattered were the results i.e. MTN being allowed to get away with it so often,” added the knowledgeable insider. “Mr. Fix it was so powerful that he was authorized by the Group to spend without accountability which even the CEO couldn’t do. He caused many contractors to lose out by deceptively telling SA that this was order from above: co X has been referred to us by State House and that we are sidelining company X because State House wants us to.” Sources gave the example of Fort Portal MP Alex Ruhunda whose MTN distribution agency was arbitrarily terminated and MTN bosses were confident that this politically would appease State House yet in actual sense the big man wasn’t anywhere involved in trying to politically fix Ruhunda as community members say in Fort Portal ostensibly to avenge his opposition to the scrapping of age limit in the Constitution. In the end, the plan was to have the lucrative dealership go to a company favorable to some powerful people at MTN.
THE UCC MEETINGS:
The pride and indifference with which MTN bosses acted during Telecom CEO meetings also caused them to be misunderstood for being anti-government. Some time last year, the UCC called one of those frequent CEO meetings to discuss matters arising in the Telecom sector. The MTN CEO Wim, always taking himself to be a super CEO, didn’t attend. He sent a representative who arrogantly criticized government branding Museveni Ministers and Finance Ministry technocrats very ignorant. On this occasion, the meeting had been called to get telecom CEOs’ views on OTT and Mobile money tax whose introduction President Museveni had directed. The MTN representative spoke very arrogantly creating an impression MTN was in charge and not UCC anymore. The MTN rep went as far banging tables belittling UCC bosses for failing to assert themselves before politicians whose “miscalculations” he said were going to crush the economy. “Don’t tell me about those politicians. Finance Ministry…simanya cabinet what do they know about telecom business? They are just an ignorant lot,” the MTN boss ranted as his UCC host pensively looked on. Not done, the MTN boss turned onto fellow CEOs and told them the way he knows NRM, time had come when dialogue wouldn’t work anymore. The MTN rep emphatically said time had come for telecom CEOs to stop being timid and instead prepare to take Musevenist politicians head on. Of course Museveni got intelligence of all these rantings and contempt with which the MTN boss referred to his cabinet. Subsequently those in the know weren’t surprised when politician Bobi Wine led a demonstration against OTT and mobile money tax and MTN was consequently accused by security of being behind this. “The President pushed for that new tax because he badly needs cash to run his political patronage system and keenly got interested in vows by MTN bosses to do anything to ensure the new taxes flop,” says a knowledgeable source. Indeed Wim’s subordinates deported earlier stand accused of funding the Bobi Wine movement to weaken NRM government. This is something for which Museveni can’t easily forgive anyone no matter who they are.
THE SCRATCH CARDS:
Closely related was another meeting at UCC regarding the scrapping of scratch cards. Insisting this was unnecessary cost, the telecom leaders moved to introduce e-airtime meaning scratch cards wouldn’t be available anymore. As they prepared for the meeting, CEOs caucused to generate views to be put across during the UCC meeting after which they had another with Speaker Kadaga. During those preparatory meetings, the MTN reps rebuked fellow CEOs for insisting on dialogue with government which MTN bosses maintained had become so unreasonable and beyond dialogue. The MTN reps insisted on confrontation insisting more than enough telecom capability and clout had been built to the extent that if they worked together as telecoms they could politically cripple the Museveni regime in whatever way they choose. This frightened CEOs of other telcos some of whom are suspected to have communicated their discomfort (regarding the MTN belligerence) to Museveni’s State House intelligence. Even during the meeting with the Speaker, the MTN bosses spoke so arrogantly, Kadaga became hardened and ensured MPs voted against the scrapping of scratch cards, a cost telcos say eats into their profit. This MTN approach angered other CEOs whose belief was that through dialogue government would permit the new innovation and have the scratch cards scrapped in a phased manner. Profit repatriation, coupled with persistent under declaration of tax obligations, is another thing greatly angering Museveni who badly needs money to fund his early political campaigning for purposes of overcoming Bobi Wine in 2021.
Its also true that the MTN management has been squeezing key Museveni supporters out of business. Prominent among these is Simba Telecom proprietor Patrick Bitature. He is a business partner of Eric Van Veen, the man who powerfully pioneered MTN in the Ugandan market and made it a strong brand. However, Bitature has lately not been happy financially having fallen on hard times. His Simba Telecom relies on MTN distribution dealership up to 90% of its revenue base. This ceased the moment his Kampala market was split up and a company owned by one of the big men at MTN was brought in to share the market with him. This made his revenues to plummet like never before and its part of the reason he is these days often written about in the media as a struggling city tycoon. In the past he was among those key partners that could sweet-talk Museveni not to crack the whip on MTN and without him being as happy as he once was, MTN is left in a more awkward situation. Bitature had to pay the inevitable price as two powerful officials at MTN (names withheld) pursued revenge against Eric Van Veen whom they envied because of his impactful State House connections. The two powerful officials filed fake reports at Group Headquarters prompting SA to knife him. Museveni also is an envious giver who never tolerates others being a source of material welfare to those who serve him and Andrew Mwenda says that is one reason why Sudhir Rupalleria (whose CBL used to financially bail out Ministers and MPs) got into trouble. The fact is MTN has been in a habit of financially bailing out some politicians especially during campaign time.
Other things that angered Museveni about CEO Wim Vanhelleputte was his apparent indifference even after the State deported officials it considered offensive three weeks ago. These included Olivier Prentout, Elsa Muzzolinni and Ann Tabura. The trio continued executing work on behalf of MTN Uganda directly reporting to Vim yet they had ceased to hold office. For instance, they last week attended the MTN global leaders retreat in Dubai where they propagated lots of anti-Uganda propaganda. They continued with their mischief (eavesdropping on Ugandan officials’ confidential chats) because much of the MTN data is syndicated outside Uganda. At the end of it all, GoU considered Wim to be too indifferent to reform the MTN operations as fast as GoU wants. Wim’s dramatic exit came days after MTN Uganda fired its long serving employee Sr Counsel Anthony Katamba who at the time served as GM Enterprise Development.