News circulating in Swaziland that a second mobile
phone operator might soon operate in the kingdom is fanciful.
The present monopoly provider MTN has the kingdom’s absolute
monarch King Mswati III in its pocket and the Prime Minister Barnabas Dlamini
has substantial financial interests in the company and it is not in his
personal interest to see competition in the market.
The Times Sunday, an independent newspaper
in Swaziland, reported that a company called Swavitel with connections to Vietnam-based
mobile operator Viettel Telecomm was awaiting a decision of the Regulator of
the Swaziland Communications Commission (SCCOM) on its application to register.
The newspaper gave no further information about what
services Swavitel hoped to provide.
MTN has been the monopoly mobile provider in
Swaziland since 1998 and services are provided in a joint venture between MTN,
the Swazi Government and the Royal Family.
MTN pays dividends directly to the King who holds 10
percent of the shares in MTN in Swaziland and is referred to by the company as
an ‘esteemed shareholder’. It is
reported that MTN paid E114 million (US$11.4 million) to the King over the
past five years.
In 2009, Earl Irvine, then US Ambassador to Swaziland,
wrote
a confidential cable (later published by Wikileaks) in which he said the
King operated in his own financial interest. Part of the cable said, ‘Royal
politics and King Mswati’s business interests appear to have caused the ouster
of Mobile Telephone Network (MTN) CEO Tebogo Mogapi and halted parastatal
Swaziland Post and Telecommunications Corporation (SPTC) from selling the MTN
shares it owns to raise money
for a Next Generation Networks (NGN) cell phone
project.
for a Next Generation Networks (NGN) cell phone
project.
‘Industry and press observers privately indicated
that the King, who already owns many MTN shares, had wanted to purchase the MTN
shares himself at a cheaper price than the buyer, MTN, was offering SPTC.
‘Government officials later prevented the sale, and
recently did not renew the work permit for CEO Mogapi, a South African citizen,
apparently in retaliation for his role in the transaction, as well as the CEO’s
reported decision to oppose government efforts to use the MTN network for
electronic surveillance on political dissidents.’
The cable went on, ‘The government’s halt of
parastatal SPTC’s sale of MTN shares demonstrates the impact the King’s and
other influential individuals’ private business interests can have on business
transactions in Swaziland.
‘Government officials would likely prefer a more
malleable Swazi CEO at MTN who would cooperate more fully with royal and
government wishes.’
In 2011
it was reported that Prime Minister Dlamini owned E392,000 worth of shares
in Swazi Empowerment (Pty) Limited (SEL), a company that in turn had a 19
percent shareholding with MTN Swaziland.
Dlamini is the man in charge of the
government-controlled parastatal, SPTC and is therefore a key decision maker in
the affairs of Swaziland’s national posts and telecommunication.
This raised questions about Dlamini’s impartiality
when making decisions about SPTC.
In September
2011, Musa Holphe, of the Swaziland Coalition of Concerned Organisations,
wrote ‘Since SEL’s main, if not its only, investment is MTN Swaziland it is
important to understand that the value of the SEL shares will be slashed if
anything happens that affects MTN’s profitability.’
He added, ‘It is shocking to see how much money is
generated by MTN and that, in spite of the grinding poverty of the majority of
us; vast riches are still secretly flowing into the pockets of the elite.’
A research article written by Ewan Sutherland of the
University of the Witwatersrand, Johannesburg, South Africa, and published in December 2014 in the
Communicatio academic journal, explored telecommunications in Swaziland and
concluded there was no competition for mobile phones in the kingdom and ‘the
monarch and his cronies are financially tied to Swazi MTN, seeking to neuter
the state-owned SPTC. The government has no concern for consumers, service delivery
or economic growth, with the King and his prime minister looking after their
personal financial interests.’
In the article, written before the news about Swavitel
emerged, Sutherland wrote , [I]t is difficult to see how any investor could
have confidence, unless it had the sovereign on their side and, more likely, in
their pocket.
‘The monarch has a significant and lucrative
investment in the principal operator, with the effect of confusing and
confounding an already feeble system of governance. The opaque profit-seeking
of the King conflicts with the purported aspiration to good governance of
telecommunications markets and the interests of his subjects. In a
constitutional monarchy, arrangements can be made to keep the investments of a
monarch separate from politics, allowing for transparency, accountability to parliament
and the avoidance of interference with governance (e.g., Japan and the
Netherlands).
‘A feudal monarchy knows no such distinction, there
are no conflicts of interest for ministers, regulators and directors – they
obey their king. It echoes the problems of Morocco, where its king has private
interests in telecommunications, has ministers sit on the supervisory board of
the stateowned operator, and he appoints the regulator and is head of the
judiciary.
Ordinarily the MTN Group would be expected to favour
competition and market entry. However, in the Kingdom of Swaziland it has
violently opposed competition, going to considerable lengths to block a second
mobile operator and even a fixed wireless service. This record removes any presumption
in other jurisdictions that its actions are pro-competitive. Equally, it has
been happy to work with Mswati III, one of the exotic collection of autocrats
with whom it does business, with no fear of reputational risk.’
See also
KING LIVES LAVISHLY ON FIRMS’ DIVIDENDS
SWAZI ELECTION – SPONSORED BY MTN
DOES PM HAVE A FORTUNE FROM MTN?
US DECRIES SWAZI KING ON MTN DEAL
PHONES CUT AS SWAZILAND PROTESTS
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