Employees of the Lesotho Communications Authority (LCA) hold shares at one of the telecommunications Companies-Vodacom Lesotho which they are also supposed to be regulators of.
The revelation was made Minister of Communications, Science and Technology Keketso Sello, who says that 31% of LCA stuff (which is 11 employees out 36 employees) hold shares at Vodacom Lesotho thus making it difficult for LCA to regulate the company.
“The report revealed that 31% of employees, some in critical management positions have an indirect financial interest in a dominant licensee within the telecommunications,” he said.
Sello said “the assessment reveals that it would be challenging for the authority to achieve its mandate and objectives of consumer protection, education, and efficient allocation of finite resources and effective management of competition due to key personnel being conflicted.”
He said that although the report is limited to current employees, it is vital to note that several key former executive employees of the authority whose employment ended within the last 36 months had and still have an indirect interest in one of the major licensees based on company registry records.
“Necessary measures are being taken to address the situation based on the severity of the harm to the authority and the public interest. We remain independent and act without fear or favor in identifying the root cause for commutations market failure to ensure that the authority maintains principles of accountability in fulfilling its mandate,” he said.
Sello stated that in the light of the recent developments worldwide as well as the challenges faced by the government of Lesotho to stimulate the recovery of the economy through strategic policy direction and stakeholder collaborations, the ministry of communications, science and technology has identified the following key focus areas in the short to medium term.
“In recognition of the of the significant role played by our local mobile network operators in supporting the economy recovery and after comparing the proportion of local versus foreign supply of goods and services, we commenced stakeholder negotiations with our mobile network operations to discuss the feasibility of improving local sourcing of goods and services to stimulate and support local suppliers and economic recovery,” he said.
Sello announced that in collaboration with the Authority, “we have agreed on the submission of quarterly action plans with measurable outputs for short, medium and long-term measures to be taken on a collaborative basis to improve local procurement of goods and services from suppliers with a majority local shareholding or control. The meaning of local supplier for purpose of this exercise is a supplier that has met all legal requirements to operate in Lesotho and majority shareholding being Basotho.
“Members of the public may have noted with appreciation, the recent invitation to local suppliers made by Vodacom Lesotho through various media platforms in support of this initiative and we applaud that,” he said.
“We have received considerable public outcry regarding limited access to communications services in the country. Through the Universal Service Fund housed within the LCA, we have introduced the following changes to existing conditions of usage and infrastructure sharing to improve competition and level the playing field between local mobile network operators. Opening of the closed tender process for construction of base transceiver stations (BTS) to allow local contractors to construct BTS to be used and shared by mobile networks immediately upon commissioning. The mobile network operators will share the operational and maintenance costs of the BTS’s including access roads. The Authority will facilitate the renewal of a memorandum of understanding between mobile operators regarding the terms and conditions of infrastructure sharing,” he said.
Sello indicated that on the 8th September 2020, when LCA was presenting the key regulatory developments to the cabinet chaired by the prime minister, the authority was advised by the PM that to enhance effectiveness of regulation, the Authority should lead by example and ensure that the authority is in compliance with the laws of Lesotho.
“Within my 100 days in office, I directed the authority to conduct an employee declaration of interest to ensure that the authority and its employee remain independent, impartial and have no conflict of interest in their dealings with licensees. This exercise was relevant due to the ongoing court case wherein one of the dominant licensees is challenging revocation of its license due to a lapse in managing conflict of interest,” he said.
According to the Minister, the declaration of interest by employees was guided by section 28 of the prevention of corruption and economic offences act 1999.
Last year LCA was in the fray with Vodacom Lesotho after labeling it perpetual industry delinquents who don’t want to toe the line. To that effect Vodacom had been slapped with a M134 million fine or have the telecommunications giant company have its license revoked.
The matter had eventually been elevated to the High Court of Lesotho as Vodacom sought to get the court’s intervention as LCA was interdicted from executing the revocation.