NAMIBIA’S cellphone and digital regulator has paved the way for government’s total control of the sector, raising concerns of a monopoly that will hurt customers and retard economic development.
Information minister Stanley Simataa yesterday confirmed that the Communications Regulatory Authority of Namibia (Cran) has approved the sale of MTC’s 34% foreign-owned shares to Namibia Post and Telecommunications Holdings (NPTH), making the parastatal the sole operator in Namibia’s fixed line and mobile telecommunications sectors. Simataa referrred further questions to Cran.
Last year, Cran refused to approve the 34% shareholding transfer to NPTH to prevent concentration of the market in one entity and to promote competition and private investment.
Cran chief executive Festus Mbandeka yesterday would not say why they changed their position and approved the sale of the shares to NPTH.
NPTH, which already owns 66% of MTC, is now expected to buy the remaining 34%, taking management control from Dutch company Samba Luxco.
In addition to MTC, the Namibia Post and Telecommunications Holdings fully owns Telecom Namibia, the second-largest mobile phone operator and the only fixed line service provider.
The Namibian understands that NPTH plans to list MTC on the Namibian Stock Exchange, with the Government Institutions’ Pension Fund lined up to buy the bulk of the shares.
The move is seen as a failure to attract foreign investment that would have come with technical expertise.
NPTH is reportedly bent on retaining management control of MTC, which was relinquished when the 34% shareholding was sold to Portugal Telecom.
With management control government would strengthen its role as both player and referee (through Cran and the Competition Commission) in the information communication technology field, which is the main driver of commerce around the world.
Finance minister Calle Schlettwein said there were many aspects involved in the buying of the MTC shares, but that the public would be informed in due time.
He does not think MTC will become a financial risk for government in future.
“We think it is a good thing if we have full ownership […] We believe the risks are very well mitigated, and the economic gain is far better,” he noted.
Schlettwein said private investment was still an option and would be explored once the shares have been transferred to government.
The Institute for Public Policy Research’s associate researcher, Max Weylandt, said he hopes in the name of transparency and accountability that Cran reveals why it reversed its earlier decision on the sale of the MTC stake to NPTH.
He said having several shareholders does not automatically make the entity more competitive, even though this argument has been put forward by others.
Weylandt said he did not know much about MTC’s internal dynamics to know whether foreign partners ensured good performance in the past.
With regards to MTC’s possible reliance on government bailouts in the future, he said the entity has been well-run, but bailouts in future could not be ruled out.
Insiders and economists alike criticised the move by Cran as detrimental to the economy and to consumers, who could be forced to pay higher costs for poor and outdated services as NPTH will not have any competition to innovate to bring down costs.
The Namibia Competition Commission (NCC) in late January said it was against MTC and Telecom being owned by one company as it would reduce competitiveness.
NCC chief executive Vitalis Ndalikokule said the NCC has prohibited the sale of shares to NPTH, and this was done with the public’s input.
He said it is now up to the industrialisation ministry to review the decision, and pronounce itself. “The ministry has four months to respond. So, there is still time.”
Ndalikokule said although Cran has approved the sale of shares, there was nothing they could do as Cran followed its own procedures.
“We are concerned. Our concern was the common ownership of MTC and Telecom when they are competitors. Under one shareholder there will be no incentive for them to compete,” he stressed.
Back in 2016 Cabinet approved a plan for NPTH to buy the 34% MTC stake, which was valued at N$3 billion, using civil servants’ retirement savings.
