MTC, Telecom cross swords

NAMIBIA’S sole mobile phone operator, MTC, yesterday launched a broadside at fellow parastatal Telecom Namibia over a planned takeover.

MTC did not pull its punches as it told a parliamentary committee in Windhoek that Telecom wanted “to grab MTC’s cash”, that it wanted a quick-fix solution to its own financial woes, and that a monopoly was unhealthy and would be to the detriment of Namibian consumers. The Namibian has learnt that Telecom Namibia last year submitted a proposal to Cabinet that Mobile Telecommunications Limited become a subsidiary of it as part of the envisaged restructuring of the wholly Government-owned Namibia Post and Telecom Holdings (NPTH), the parent company of Telecom, MTC and Namibia Post Limited.The proposed shareholding structure would see Telecom own 51 per cent of MTC.Thirty four per cent of the mobile phone company is owned by Portugal Telecom while the remaining 15 per cent is a Black Economic Empowerment stake.Telecom would however still be wholly owned by NPTH.Addressing the Parliamentary Standing Committee on Economics, Natural Resources and Public Administration, MTC Managing Director Bengt Strenge said his company opposed a takeover by Telecom.He accused the fixed line company of eyeing MTC’s profits.Describing the issue as controversial, Strenge told some 15 members of the parliamentary committee that Telecom was struggling financially and wanted control of MTC because of its money.MTC spokesperson Albertus Aochamub also reiterated Bengt’s words.He said Telecom wanted to take the easier route of grabbing MTC’s cash instead of turning itself into a profitable company.MTC paid Government a dividend of N$110 million last year compared to Telecom’s N$14,4 million; while MTC handed over N$80 million in 2004 with Telecom managing N$12 million.Parliamentary Committee Chairman Hage Geingob said it was unfortunate that there was a tendency in Namibia of “tearing up” successful entities.However, he added, his committee would also have a briefing with Telecom Namibia to hear their side of the story.Strenge said another takeover fear would be that profit transfers from MTC to Telecom would have a negative impact on the other two stakeholders of the cellphone company.MTC is also wary of its dividends not reaching Government, and that Telecom would have a “perceived stronger monopoly” to the detriment of consumers.Strenge said MTC should be competing with Telecom and PowerCom, but the envisaged takeover would not allow for such a scenario.PowerCom, a joint venture between Norwegian leading IT company Telenor and NamPower, was recently awarded the second cellular operator licence by Government ending MTC’s monopoly which it had held since July 1995.It was MTC’s desire to see the current shareholding structure remain in place, with the NPTH continuing as a property owner – that is currently leased by MTC, Telecom and NamPost.Aochamub said the issue went back 11 years – at that time, MTC was supposed to be a subsidiary of Telecom but this did not happen as legislation prevents Telecom from having subsidiaries.And Telecom is now alleged to be pushing for the law to be reversed by lobbying Cabinet.Contacted for comment yesterday, Telecom Namibia Managing Director Frans Ndoroma declined to comment on an issue that was under discussion.He said it was not a matter for the media yet as a decision had not yet been reached.He added that both Telecom and MTC had made their presentations to Government and were awaiting its decision.”What you have is just a one-sided view,” he claimed.”We (Telecom) shall comment when we have a definite answer.I am not in a position to discuss the issue with the media,” he said.The Namibian has learnt that Telecom Namibia last year submitted a proposal to Cabinet that Mobile Telecommunications Limited become a subsidiary of it as part of the envisaged restructuring of the wholly Government-owned Namibia Post and Telecom Holdings (NPTH), the parent company of Telecom, MTC and Namibia Post Limited.The proposed shareholding structure would see Telecom own 51 per cent of MTC.Thirty four per cent of the mobile phone company is owned by Portugal Telecom while the remaining 15 per cent is a Black Economic Empowerment stake.Telecom would however still be wholly owned by NPTH.Addressing the Parliamentary Standing Committee on Economics, Natural Resources and Public Administration, MTC Managing Director Bengt Strenge said his company opposed a takeover by Telecom. He accused the fixed line company of eyeing MTC’s profits.Describing the issue as controversial, Strenge told some 15 members of the parliamentary committee that Telecom was struggling financially and wanted control of MTC because of its money.MTC spokesperson Albertus Aochamub also reiterated Bengt’s words.He said Telecom wanted to take the easier route of grabbing MTC’s cash instead of turning itself into a profitable company.MTC paid Government a dividend of N$110 million last year compared to Telecom’s N$14,4 million; while MTC handed over N$80 million in 2004 with Telecom managing N$12 million.Parliamentary Committee Chairman Hage Geingob said it was unfortunate that there was a tendency in Namibia of “tearing up” successful entities.However, he added, his committee would also have a briefing with Telecom Namibia to hear their side of the story.Strenge said another takeover fear would be that profit transfers from MTC to Telecom would have a negative impact on the other two stakeholders of the cellphone company.MTC is also wary of its dividends not reaching Government, and that Telecom would have a “perceived stronger monopoly” to the detriment of consumers.Strenge said MTC should be competing with Telecom and PowerCom, but the envisaged takeover would not allow for such a scenario.PowerCom, a joint venture between Norwegian leading IT company Telenor and NamPower, was recently awarded the second cellular operator licence by Government ending MTC’s monopoly which it had held since July 1995.It was MTC’s desire to see the current shareholding structure remain in place, with the NPTH continuing as a property owner – that is currently leased by MTC, Telecom and NamPost. Aochamub said the issue went back 11 years – at that time, MTC was supposed to be a subsidiary of Telecom but this did not happen as legislation prevents Telecom from having subsidiaries.And Telecom is now alleged to be pushing for the law to be reversed by lobbying Cabinet.Contacted for comment yesterday, Telecom Namibia Managing Director Frans Ndoroma declined to comment on an issue that was under discussion.He said it was not a matter for the media yet as a decision had not yet been reached.He added that both Telecom and MTC had made their presentations to Government and were awaiting its decision.”What you have is just a one-sided view,” he claimed.”We (Telecom) shall comment when we have a definite answer.I am not in a position to discuss the issue with the media,” he said.