A document from Rwanda’s telecommunications regulator, the Rwanda Utilities Regulatory Authority (RURA) has revealed details of the actions taken by MTN Rwanda that culminated into a Rwf 7billion fine levied on the company.
RURA said in a statement dated May 16th that MTN Rwanda had breached its license obligations hence attracting the fine.
According to the document which PC Tech Magazine has seen, MTN Rwanda was given strict directives by RURA on January 28th, 2011 and February 7th, 2011 prohibiting its inclusion in the MTN South and East Africa (SEA) IT hub based in Uganda.
Failure of this would be considered as a breach of its license obligations leading to appropriate measures in accordance with applicable Rwandan laws.
However, MTN Rwanda proceeded to implement the IT shared services initiative and hosting its IT services in the MTN IT hub Uganda despite having discussed the matter with the regulator.
The statement indicates that MTN Rwanda had also been warned that such action would constitute a serious breach of license obligations.
“Despite the directives, an interim phase for the hub was implemented from September 2012 and on October 26th, 2014. MTN Rwanda Ltd fully operationalized its IT Services management under MTN Hub in Uganda,” the document reads in part.
According to RURA, MTN was slapped with a daily administrative fine of Rwf5 million from October 26th, 2014 to June 27th, 2015.
The fine was later raised to a daily Rwf15 million from June 28th 2016 to March 20th 2017, all totaling to the final Rwf7 billion.
Whereas it’s clear that MTN Uganda has better ICT capacity, MTN Rwanda hosting its IT services in Uganda would be presumed as a tax avoidance gimmick by the South African company.
MTN is Rwanda’s largest telecommunications operator with up to 4 million subscribers.
Other telecoms companies operating in Rwanda include Tigo, and Airtel Rwanda.
Owned by South Africans, MTN currently operates in 20 countries.
In 2016, it was fined $600 million by the Nigerian government for failure to disconnect unregistered simcards.