Econet sues Potraz for $132m

Telecoms

Econet Wireless has approached the High Court seeking an order compelling the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) to pay over $132 million in damages for losses incured after the telecommunications firm was ordered to reduce its tariffs in 2014.

Econet has also accused Potraz of making the telecommunication playfield uneven after allegedly failing to order other network providers such as NetOne, TelOne and Telecel to pay license renewal fees in the sum of $137, 5 million, which it was allegedly made to pay before being ordered to reduce the tariffs.

In the summons issued by Econet and filed at the High Court last month, the mobile network firm said it was also seeking an order compelling Potraz to order NetOne, TelOne and Telecel, cited as 2nd, 3rd and 4th respondents, to pay license renewal fees in the sum of $137, 5 million each.

The telecoms company also wants the court to issue an order restoring the tariffs set out in its (Econet) 2013 license structure and setting aside Potraz’s Regulatory Determination 1 of 2014.

According to Econet sometime in May 2013, it concluded an agreement with Potraz and the government where it was agreed that Econet would be issued with a new license on the same terms and conditions as its old license, save in respect of the matters specified in the agreement.

Pursuant to the license renewal agreement Potraz issued Econet with a license dated July 10, 2013 in terms of which Econet was entitled to charge and collect from its customers until July 2018.

“In breach of the plaintiff’s (Econet) license issued on 10 July 2013, 1st defendant (Potraz) reduced the tariffs charged by plaintiff from those set out in annexure “B” hereto to those set out in its Regulatory Determination 1 of 2014,” Econet said.

The company said the reduction in tariffs was ultra vires the powers conferred on the 1st defendant by section 100 of the Telecommunications Act.

“The reduction in tariffs was discriminatory in its effect in that it applied the same to plaintiff as it did to 2nd, 3rd and 4th defendants, yet plaintiff had paid the license renewal fees of $137, 5 million in full while 2nd, 3rd and 4th defendants had not,” Econet said.

“As a result of defendant’s breach of the license renewal agreement, and, or the terms and conditions of plaintiff’s license, plaintiff has suffered damages from loss of profit amounting to $132 670 807 which defendant is liable to pay.”

Econet added: “Plaintiff will continue to suffer damages at the same rate until the tariffs provided for in its license have been restored, which damages, 1st defendant is liable to pay.”

In the second claim Econet said it was an express term of the license renewal agreement that Potraz would charge and collect from NetOne, TelOne and Telecel the same license fees on the same payment terms that were charged and collected from it.

In the third claim Econet said it was seeking an order compelling Potraz to disclose the information relating to the Universal Service Fund for which Potraz is the trustee.

Econet said it had contributed over $59 million to the fund from March 2009 to November 2015 and as such it was entitled to a report.
Source: News Day 14 January 2016