A protracted regulatory battle is looming for Vodacom in Lesotho after the company said it will contest the decision by the Communications Authority of Lesotho (LCA) to cancel its operating licence and declared that it was business as usual for its subscribers.

Last week, the company had its operating licence revoked by the LCA for failing to pay a penalty by the 7th of October deadline.

Vodacom Lesotho has about 1.2 million subscribers and around 500 000 mobile money users in the small mountainous kingdom.

Over the weekend the company said it would head to court and argues that the regulator’s decision does not make regulatory sense and is against the principles of public policy.

“We have no option but to seek relief in the courts because the LCA’s decisions imposing an excessive fine as well as the revocation of Vodacom’s operating license are both erroneous as a matter of law and public policy,” said Philip Amoateng, Managing Director for Vodacom Lesotho.

Vodacom Lesotho has reportedly been penalised for failing to roll out internet connectivity to rural schools after receiving funds from the Universal Services Fund.

Authorities have also accused the operator of violating license conditions after having allegedly failed to pay license fees on time.

A Vodacom regional executive, who spoke on condition of anonymity, said: “It is one of those regulatory uncertainty issues that may draw out for long. We still expect Vodacom South Africa to play a key role in resolving this and finding a settlement, but that is if the market is really important for them.”

In reference to the LCA’s decisions, Vodacom Lesotho stated: “Imposing an excessive fine as well as the revocation of Vodacom’s operating license are both erroneous.”

It further argues that it should be accorded 14 days to contest the imposition “of the hefty fine by Lesotho”. Vodacom Lesotho was initially fined US$8-million and was only supposed to pay a portion of the fine, with the bulk of it suspended for five years.

Amoateng added: “Vodacom notified the LCA of its intention to challenge the lawfulness of this decision and was shocked to receive the Notice of Revocation of the Unified License, dated 8 October 2020, in flagrant disregard of the rule of law.”

It is against this backdrop that the company will now be seeking redress over the issue in the courts.

However, there are indications from Lesotho that the specialist Commercial Court, which many believe has to preside over the dispute, is not fully operational.

Motebo Ntabe, a legal expert in Lesotho, posted a message via Twitter: “The Commercial Court has not been functional for more than a week; there are no Judges. Urgent matters were initially referred to a Judge on call at the "High Court". That has since stopped.”