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R9.3m Ugandan fine adds to MTN woes

Paula Gilbert
By Paula Gilbert
Johannesburg, 19 Nov 2015
MTN is appealing a R9.3 million fine set down by a Ugandan court.
MTN is appealing a R9.3 million fine set down by a Ugandan court.

MTN is appealing against a R9.3 million ($662 000) fine levelled against it in Uganda.

"MTN Uganda is appealing the judgement and therefore the matter has not been finalised," according to Chris Maroleng, group executive for corporate affairs for the MTN Group.

The fine was laid down by a Ugandan commercial court on 6 November for unlawful and anti-competitive behaviour towards mobile money business EzeeMoney.

Justice Henry Peter Adonyo ruled MTN must pay a total of 2.3 billion Ugandan shillings to EzeeMoney for general damages for loss of business, as well as punitive damages to deter not only MTN, but also to warn other companies against uncompetitive business tactics.

According to Nigerian publication, Leadership, MTN and EzeeMoney were in partnership for a while but in 2013 MTN cancelled the contract, saying EzeeMoney was a direct competitor to its mobile money business.

EzeeMoney then went to court alleging MTN's action had "restricted and distorted competition". It also argued MTN used its exclusivity agreements to stop its agents from working for other firms with similar business, further limiting competition.

MTN is still facing a R74 billion ($5.2 billion) fine in Nigeria for failing to disconnect over five million customers with unregistered SIM cards. The Nigerian fine was meant to be paid on Monday, 16 November, but the Nigerian authorities agreed to give MTN more time while negotiations with regulators continue.