Maputo — Mozambican Transport Minister Tomas Salomao on Monday said that, if the South African mobile phone company Vodacom is unable to reach agreement on inter-connection charges with the Mozambican public telecommunications company, TDM, then the regulatory body, the Mozambique National Communications Institute (INCM), may be obliged to step in.

Last August Vodacom won the tender to become the second mobile phone operator in Mozambique. It is supposed to start its operations in April - but has reached no agreement with TDM on interconnection charges. AIM understands that Vodacom broke off the negotiations with TDM, and that there is no sign of any preparations to meet the April deadline. Press reports last month suggested that Vodacom had put pressure - so far unsuccessfully - on the government to force TDM, and its mobile phone subsidiary M-Cel, to double the prices they charge consumers.

Speaking at a Maputo press conference, Salomao recognised that this was a delicate issue, given the money involved. As a last resort, the INCM could step in and determine the inter- connection charges, but Salomao made it clear that the government would much prefer Vodacom and TDM to reach an understanding.

Asked how Vodacom could possibly start its operations in April, Salomao merely insisted that Vodacom has an obligation to comply with the timetable laid down in the tender documents. It was on this basis that it had been awarded the licence.

Should Vodacom fail to comply with its obligations, then the case could end up in court, the Minister warned. But legal action was not the government's chosen option.

"We would not like to go down that road", he said. "What we want is to see Vodacom complying with what is laid down in the tender documents".

But the government has very little leverage over Vodacom.

The South African company was supposed to pay 15 million US dollars licence - but in fact this money has been deposited in an escrow account with a Mozambican commercial bank that cannot be touched without Vodacom's authorisation. Thus the Mozambican government has no financial leverage over Vodacom.