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MTN Swaziland to 'sue' state-owned telco

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MTN reportedly plans to file a $100 million lawsuit claim against Swaziland Posts and Telecommunications Corporation (SPTC), after the latter allegedly breached a joint contractual agreement by setting up a competitor to MTN.

SPTC, which owns a 41% stake in MTN Swaziland, launched its own separate telco company last year.

Swaziland's Times Newspaper says that SPTC's newly setup telco company managed to attract 50,000 fixed-wireless customers, 14,000 mobile phone subscribers and 10,000 users of its mobile internet dongles.

MTN Swaziland told The Times that it lost between $17 million and $65 million, owing to SPTC setting up a competitor. As a result, MTN Swaziland is therefore reportedly seeking payment for breach of contract and for losses incurred.

This potential court case between MTN and SPTC has also come about at a time when Swaziland's telco market has not been accustomed to competition.

The small African country only has 800,000 mobile subscribers, with a penetration rate of 65% according to Informa Telecoms & Media. All of these subscribers are on MTN Swaziland's network.

SPTC, which has a dual purpose of being a state-owned telco and a communications regulator, reportedly closed its own mobile unit in March this year.

“SPTC owns 41% interest in MTN Swaziland, so given the fact that they so hurriedly rolled back their network in March says they might potentially be in breach of the contract," said Kalyan Medapati, senior analyst, Global Markets, Informa Telecoms and Media.

Arthur Ngcobo, acting Board Chairman at SPTC, also told The Times that the amount demanded by MTN Swaziland was 'exorbitant'.

"Under normal circumstances, this is a lot of money. It is almost equivalent to the asset value of SPTC. This money is too much. SPTC can’t afford to pay such," he said.

When ITWeb Africa contacted SPTC, the organisation said it was not prepared to comment on the matter.

"We do not have comment because we are unaware officially. We are unaware of any intention to file such a lawsuit," said Sifiso Nyembe, corporate communications manager at SPTC.

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