Namibia: Way Cleared for Leo Takeover

Telecoms

Mobile operator Leo will be granted its service licence in the coming days after it was cleared as having met all regulatory requirements. Leo could not get a licence because it was entirely foreign owned, which is contrary to the Communications Act provision that all telecommunications operators in the country should be majority Namibian owned.

This provision prevented the Communications Regulatory Authority of Namibia (Cran) to issue a licence to Leo.

Telecom Namibia's plans to buy out Leo's foreign owners were scuppered because both Leo and Telecom did not have the necessary mobile operating licences. When the issue of a Telecom takeover of Leo was reported, Cran said such a takeover would not be possible because regulatory requirements were not met.

The Namibian has learnt that a special waiver was granted by the Ministry of Information and Communication Technology to pave the way for the merger between Telecom and Leo.

However, ICT Minister Joel Kaapanda last week denied that the ministry was in any way involved in the waiver. In an SMS message Kaapanda said, "my ministry does not give permission for the issuance of service licence(s)".

Communications Regulatory Authority of Namibia (Cran) board chairperson Lazarus Jacobs told The Namibian that Kaapanda has given the communications regulator special permission to issue Leo with a service and technology neutral licence.

According to Jacobs Telecom Namibia and Leo had sought special provision from Kaapanda for the service licence to be issued by Cran, adding that the Information Minister approved the request.

Speaking in the context of the possible takeover of Leo by Telecom Namibia earlier in the year, Jacobs told The Namibian that if Telecom were to buy Leo, it would do so with a telecommunications service licence, and that certain requirements must be met in order for Cran to issue such a licence.

According to Cran spokesperson Lelanie Basson, Leo will be presented with its service and technology neutral licence "in the coming days" as "all issues pertaining to Leo's conversion were resolved at the end of March".

Basson was responding to a set of questions sent to her over an article which appeared in the Windhoek Observer last Friday where it was alleged that Cran had withheld Leo's licence because the mobile operator owed the communications regulator N$22 million in outstanding fees.

Basson said licences are not withheld in the strictest sense, adding that they are simply converted and that the establishment of the new telecommunications regulatory regime requires such transfer.

As a result, it is important that "all existing licensees comply with the conditions as set out by the Communications Act", Basson said.

However Leo remains 100 per cent foreign owned, and it is believed that the special permission sought from Kaapanda relates to the provision in the Communications Act which requires that the service provider must have majority Namibian ownership.

"The licences of those licensees that did not comply with the transitional regulations were not converted. There were various unique compliance issues across the board for the licensees," Basson said.

She neither confirmed nor denied that Leo either owed or still owes the communications regulator N$22 million in outstanding fees.

Jacobs said the acquisition of Leo by Telecom had not been concluded. Earlier this year, ICT Deputy Minister Stanley Simataa said the takeover deal had been approved in principle by Cabinet. It is believed that the acquisition of Leo could cost the national communications provider approximately N$1,2 billion.