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Swazi telco regulator to cut 250 jobs

By , IT in government editor
Swaziland , 18 Sep 2012

Swazi telco regulator to cut 250 jobs

A quarter of the employees at the Swaziland Post and Telecommunications Corporation (SPTC) stand to lose their jobs after MTN Swaziland won a case in the International Court of Arbitration (ICA) that, as a result, instructed SPTC to discontinue their mobile services.

Earlier this year ITWeb Africa reported that the country’s regulator was embroiled in a $100 million lawsuit with MTN Swaziland after it breached the terms of their joint contractual agreement.

SPTC set-up a mobile telephone network, called ONE, which was in direct competition with MTN Swaziland, the country’s sole mobile network provider at the time. SPTC also setup Fixedphones, which sold devices such as cellphones and dongles capable of working on the ONE network.

Moreover, ONE managed to sign up 14,000 mobile phone subscribers and 10,000 users of its mobile internet dongles, according to the Times of Swaziland.

Subsequently, MTN Swaziland told The Times that it lost between $17 million and $65 million, owing to SPTC setting up a competitor.

SPTC, though, finds itself in an odd position, as it is both regulator of the country's telco sector and a majority shareholder in MTN Swaziland, with a 41% stake in that company. King Mswati III holds a 10% stake at MTN Swaziland, while Prime Minister Barnabas Sibusiso Dlamini is a shareholder at Swaziland Empowerment, which owns 19% in the telco.

It was last month that the ICA ruled in favour of MTN Swaziland ordering SPTC to shutdown its mobile operations and services.

According to South African publication Business Report, Menzi Hlophe - SPTC’s staff association chairman - has said 250 of the corporation’s 1,000 employees would lose their jobs as a result of the company’s closure.

“These were people who were hired… to work on ONE and Fixedfone services,” Hlophe said.

Last week, the Times of Swaziland also reported that about 60% of SPTC employees participated in a picket strike against the shutdown of its subsidiary arm, Fixedfones.

The employees said Fixedfones was an essential service required by Swazis for effective communication.

Meanwhile, Kalyan Medapati, senior analyst for Global Markets at Informa Telecoms and Media, has told ITWeb Africa, that SPTC is merely following the ICA ruling.

“MTN Swaziland and SPTC have a non-compete agreement, preventing SPTC setting up a competing cellular service. This is the basis for MTN’s now multiple lawsuits against SPTC,” he said.

“The ICA is also expected to put a value on monetary compensation, accounting for probably the losses that MTN suffered due to SPTC’s services,” he concluded.

ITWeb Africa tried numerous times to get in contact with officials from SPTC for further comments, but efforts were unsuccessful.

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