SPTC BREACHES SHAREHOLDERS’ AGREEMENT?

MBABANE – The Swaziland Posts and Telecommunications Corporation (SPTC) could be in violation of the 1998 Joint Venture Agreement (JVA) it signed with Swazi MTN by selling airtime belonging to the latter’s competitor, Swazi Mobile.

The JVA provides for restraints against Swazi MTN shareholders from providing services that will directly or indirectly result in competition with the mobile telecommunications company.
However, the Times SUNDAY has seen posters placed on SPTC’s telecentres notifying customers that Swazi Mobile airtime was being sold in these outlets.

This is despite that, as per the JVA, SPTC is a majority shareholder at Swazi MTN where it holds a 41 per cent stake, while MTN International holds 30 per cent, Swazi Empowerment Limited has 19 per cent and the remaining 10 percent is held by an esteemed shareholder.

Swazi Mobile is Swazi MTN’s competitor in the country’s telecommunications industry, having received its licence in December 2016 after outshining three other applicants, namely the Viettel Global Investment Joint Stock Company trading as Viettel, Mauritius Telecom Limited and sdnet which is a partnership between Data Network Services (PTY) Limited “DataNet” and Ndlaphu Financial Services (Pty) Limited (NFS), respectively.

In the JVA, Clause 18 refers to a ‘restraint period’ which applies to any of the Swazi MTN shareholders or any of the parties which control a share of the company, 12 months from the date that it ceases to be a shareholder in the company or it ceases to control such shareholder.

By having signed the agreement, SPTC, as did by the other parties, agreed that it will not “become employed by or interested, directly or indirectly, in any manner whatsoever in any business which is in competition with the business carried on by the Company (Swazi MTN)”.

However, by selling Swazi Mobile airtime, SPTC directly competes with Swazi MTN, which also sells airtime to its mobile telecommunications customers.
SPTC also bound itself to clause 18.2.2.1 that “it will not directly or indirectly, either for its own account or as a representative or agent of any third party, persuade, induce, encourage or procure any person employed by the Company or SPTC”.

A recent assessment of competition in the mobile voice and fixed voice markets by telecommunications regulator (the Swaziland Communications Commission – SCCOM) found that Swazi MTN ‘enjoys exclusive agreements with the largest independent retailers in the country’ and such ‘significant retail reach as well as the agreements represent significant barriers to potential operators entering the market’.
SCCOM identified this as a refusal to deal, which is the refusal to supply an essential facility to a competitor.

This practice is alongside another one referred to as ‘exclusive dealing arrangements’, in which a seller prevents its distributors from selling competing product or services.
To these practices, SCCOM said: “The Commission will exercise vigilance in identifying the above-mentioned behaviour in the market. This applies to the Commission’s regulation of both the fixed and mobile voice market. Part of this vigilance involves the imposition of remedies to prevent the abuse of dominance by SPTC and MTN.”

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