South Africa: Are South African Cellphone Companies Becoming a New Form of African Government ATM Machine?

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analysis

First, the Nigerian government imposed massive fines of MTN in disputed circumstances for notional regulatory infractions. Now the executives of Vodacom's Tanzanian business have been arrested and charged with 'economic sabotage'. Is a trend emerging of African governments targeting foreign cellphone companies?

Following the bizarre arrest and imprisonment of Vodacom's Tanzanian CEO MD Hisham Hendi last week, SA's cellphone companies are quietly worried that governments outside their home base are abruptly changing investment terms and imposing dubious fines in a desperate attempt to supplement government income.

The Nigerian government has in the past imposed massive fines on MTN in disputed circumstances for notional regulatory infractions, and now observers claim this approach appears to be spreading. Yet, they are also determined to comply with local laws and say the jury is still out on whether there is a pattern emerging.

The circumstances in which Vodacom's Tanzanian MD and eight other industry figures were arrested are still vague, but they have been effectively charged with economic sabotage, a crime so serious that no bail is available. Yet, the actual loss claimed by prosecutors is a relatively modest R68-million.

According to court documents, they have been charged with unlawfully importing and installing communication...

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