NAMIBIA’S communications regulator was pressurised into approving the sale of the private shareholding in MTC Namibia to Namibia Post and Telecommunications Holdings.
reported this week that the Communications Regulatory Authority of Namibia (Cran) gave the green light for government’s total control of the mobile telecommunications sector, effectively creating a state monopoly and possibly damaging the future prospects of one of the most successful partly state-owned entities.
Government already owns 66% of MTC through Namibia Post and Telecommunications Holdings (NPTH), while 34% belongs to Luxembourg-based Samba Luxco SARL. NPTH also holds government’s shares in NamPost and Telecom Namibia.
In 2016, Cabinet approved a plan for NPTH to buy Samba Luxco’s 34% shareholding, worth over N$3 billion, with financing from the Government Institutions Pension Fund (GIPF). Under the plan, government would own 100% of MTC for some time before reducing its shareholding to 51% by selling a stake to GIPF, and listing a portion on the stock exchange.
NPTH needed permission from Cran to buy Samba Luxco’s 34%.
The Namibian reported last year that Cran blocked the initial application, partly because of concerns over the future of NPTH, which is set to be dismantled this year.
Documents show that NPTH wrote again to Cran on 20 February this year, requesting approval to buy the 34% shareholding.
Cran subsequently approved the MTC transaction on 6 March 2018 with five conditions.
One of the conditions is that GIPF should own 20% of MTC, as proposed by NPTH in its letter last month.
Another condition was that “Mobile Telecommunications Limited must be listed on the Namibia Stock Exchange within a period of 12 months”.
Cran also said 29% of MTC shares should be sold to private and/or local investors on the Namibian Stock Exchange.
The regulator warned that MTC would be punished and face consequences under the provisions of the Communications Act of 2009 if these conditions are not adhered to.
It’s also unclear why Cran approved the transaction while GIPF has not finalised its investigation into the MTC shareholding, nor decided whether to buy into the mobile telecommunications company.
People familiar with GIPF matters said a board investment committee will meet next week, but could not say whether the MTC transaction would be discussed.
Several officials briefed about this matter have questioned Cran’s sudden change of heart.
Two people said Cran officials were put under immense pressure to approve the sale of MTC shares.
understands that some senior officials at Cran drafted a document which proposed turning down NPTH’s second application to buy the shares. Sources said the Cran board twisted the arm of the regulator’s management to agree to the MTC deal. Sources added that the board told senior Cran officials that they would lose their jobs if they didn’t approve the deal.
According to people briefed about this, a Cran board member claimed that political pressure was applied on the board, which then applied pressure on Cran management.
Another Cran board member admitted that it would be risky to use GIPF money, while another one said the idea of bringing in a technical partner was a good plan, but Cran had been under pressure to decide the matter by Monday, since that was the deadline set by Samba Luxco. Government was given that deadline to buy the shareholding or forfeit the chance, said a source.
There are several concerns about the MTC deal. Some point to the dominance of government in the telecommunications sector as being problematic, and that it could dampen investments and competition in the sector.
There is talk in the corridors of power that ordinary people would benefit from the listing of MTC on the Namibia Stock Exchange. It’s not clear how exactly this would be done, but there are already concerns of another flawed empowerment scheme. A Cabinet minister, who declined to be named, said the best option was to enter into a technical partnership with a technology company that will co-manage MTC.
However, there appear to be business interests in the wings planning to lobby for a Namibian consortium to take up the shareholding.
Cran chief executive officer Festus Mbandeka and GIPF officials did not respond to questions sent to them.
Finance minister Calle Schlettwein told this week that the sale of MTC shares would be an economic gain for government.
The battle for MTC intensified last August when former information minister Tjekero Tweya removed businesswoman Ally Angula as a director of NPTH.
However, President Hage Geingob directed Tweya to reinstate Angula at NPTH, which Tweya did. As NPTH chairperson, Angula heads negotiations for the MTC stake.
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