MTN's success in Africa has not come minus pitfalls

Sunday January 27 2019

MTN

Considered among the pioneers of mobile telephony in Africa, MTN was born in South Africa in 1994 before spreading northward, eventually dominating at least 22 markets in Africa and the Middle East by 2019. PHOTO | NMG 

The EastAfrican
By The EastAfrican
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Mobile Telephone Network popularly known by its brand name MTN and its signature yellow colour set foot in Uganda 20 years ago.

Its critics at the time said it was “fleeing” its home base in South Africa where, after pioneering mobile telephony, it had been beaten in the market by rival Celtel.

Considered among the pioneers of mobile telephony in Africa, MTN was born in South Africa in 1994 before spreading northward, eventually dominating at least 22 markets in Africa and the Middle East by 2019.

But the telco’s success has not come without controversy, with its latest troubles emanating from one of its earliest markets — Uganda.

Three foreign top executives of the giant were deported on January 19, 21 and 22, with authorities accusing them of “involvement in activities that comprise state security,” the police said.

The police also summoned and interrogated MTN’s chief executive Win Vanhelleputte.

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The deportations, coming at a time when the company was still facing a licence renewal challenge, did not help quell speculation as to the extent of the troubles the telco now finds itself in with the Ugandan authorities.

But this is not the first time MTN is in trouble with authorities.

In December 2018, the firm announced it had agreed to settle a long-running dispute with the Central Bank of Nigeria over tax and dividend payouts totalling $8.1 billion.

The company had previously landed in trouble over its failure to switch off unregistered Sim cards, which the Nigerian authorities claimed was aiding Boko Haram terrorists. It was slapped with a record $5.2 billion fine.

In 2017, MTN was slapped with a $8.5 million fine by the regulatory authority in Rwanda for hosting its IT services outside the country, (reportedly in Uganda), which Kigali believed compromised its national security.

MTN entered the Uganda market in 1998 and quickly toppled market pioneer Celtel. Details available to The EastAfrican now reveal that Kampala gave a sweetheart deal to the telco to encourage its investment in the market.

The goodwill from both paid off quickly and MTN, once seen as a preserve of an exclusive club of elites, was soon available to the common man.

The company has come in for criticism for its alleged reluctance to list on local stock exchanges of countries where it has found tremendous success as a business.

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