MTN slapped with Rwf7bn fine

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The head office of MTN Rwanda Ltd in Nyarutarama

Rwanda Utilities Regulatory Authority (RURA) on Wednesday imposed a Rwf7 billion fine on MTN Rwanda Ltd over what the regulator said was non-compliance with licensing obligations by the latter, according to a statement.

According to the regulator, MTN, the country’s biggest telecom by subscription, breached licensing obligations by hosting its IT services outside the country.

MTN Rwanda Ltd provided services in contravention of Enforcement Notice and Directives issued by the regulator against hosting its IT services outside the country.

The services were for some time being hosted at the MTN IT hub in Uganda, under its regional IT shared services initiative.

“By doing so, MTN Rwanda breached its license obligation requiring it to comply with all applicable laws, regulations and any other regulatory instruments issued by the competent authority,” reads part of the statement signed by the regulator’s spokesperson Anthony Kulamba.

RURA says that on May 4 2017, the Regulatory Board conducted a hearing session in which MTN Rwanda Ltd was informed about the breach and given the opportunity to be heard, whereby the telco admitted the above mentioned breach.

“In accordance with the applicable laws, the Regulatory Board of RURA decided to impose on MTN Rwanda Ltd administrative fine of seven billion thirty million Rwanda Francs (7,030,000,000),” says the statement.

Speaking to The New Times, Kulamba said that MTN Rwanda had not been given any deadline to pay fine and urged other companies to follow their license obligations.

The breach

According to a document on RURA website, MTN Rwanda was given strict directives by RURA on 28th January 2011 and 7th February 2011 concerning the MTN IT Hub in Uganda and instructed to exclude itself from all aspects of the regional IT shared services initiative.

Failure of this would be considered as a serious breach of its license obligations leading to appropriate measures in accordance with applicable laws.

“Despite the directives, an interim phase for the hub was implemented from September 2012 and on 26th October 2014 MTN Rwanda Ltd fully operationalized its IT Services management under MTN Hub in Uganda,” the document reads in part.

The Rwf7bn fine accrues from a daily administrative fine of Rwf5 million from 26 October 2014 to 27 June 2016 and a daily fine of 15 million from June 28 2016 to March 20 2017, according to RURA.

In a brief statement released by the parent company MTN Group, the telco acknowledged receipt of the notification to the fine and said they would continue to engage with the regulator on the matter.


MTN reacts

“MTN Rwanda has received official notification of a fine equivalent to US$ 8.5 million from the Rwanda Utilities Regulatory Authority (RURA). The fine relates to non-compliance with the directives issued by the regulator prohibiting the inclusion of MTN Rwanda in the MTN South and East Africa (SEA) IT hub based in Uganda,” reads the statement MTN Group head office in Johannesburg, South Africa.

MTN has been engaging with the regulator on this matter over the past four months and currently studying the official notification and will continue to engage with the regulator on this matter, reads the statement.