Don’t wield hammer against Vodacom

THE Lesotho Communications Authority (LCA) this week slapped a M134 million fine on Vodacom Lesotho for allegedly violating its licence regulations. The staggering fine, which is unprecedented in the history of corporates in Lesotho, has sent chills down the spines of business entities particularly in the telecommunications sector. The fine could also have an adverse impact on Vodacom Lesotho itself as it represents a significant knock on its business. Vodacom Lesotho is the biggest player in the telecoms sector with over 1.5 million subscribers which represents about 70 percent of the market share. The company, which employs 220 workers, also contributes about four percent to Lesotho’s GDP in the form of taxes. Last year alone Vodacom Lesotho contributed a massive M331 million in taxes to the Lesotho Revenue Authority. So, when we speak of Vodacom Lesotho, we are perhaps speaking of the biggest player in the private sector. It is important to get this context right. While Vodacom Lesotho might have breached the regulations, there is no doubt in our minds that the punishment looks extremely excessive. No one questions the need for the LCA to enforce rules in the sector otherwise we would be promoting lawlessness. Yet in implementing the law, the LCA as the regulator must not be seen to be wielding a hammer. While the LCA might have acted within the law, it is still critical that the law be applied humanely. That is because this punitive act against Vodacom Lesotho could have an adverse impact on Lesotho’s attempts to lure potential investors to the Kingdom. It is critical that we do not scare potential investors. The reality is that the decision to punish Vodacom Lesotho will make international headlines. And once that happens, few investors will be willing to invest in a country where they might think their investments are not safe. Unfortunately, that is how the markets work. That is why it is critical that Lesotho does not send the wrong message to potential investors at a time when we need massive injections of foreign direct investment into the country. The government must move swiftly to reassure Basotho that there were no powerful politicians who exerted pressure on the LCA to take this drastic decision while angling to benefit from the resultant chaos. Vodacom Lesotho’s impact in the lives of Basotho extends beyond the matter of taxes. It trickles down to the lowest vendor on the streets selling air-time. When the company suffers, that impact will likely be transferred to those on the lowest rung. This too is a company where 20 percent of the shares are in the hands of Basotho. That is no small feat. So, whatever decision that is taken will likely have an impact on Basotho. The government must therefore be careful that in punishing Vodacom Lesotho it does not bite the hand of its own people. It must not kill the goose that lays the golden eggs. It would be a pity were Vodacom Lesotho to be forced to cut a few jobs as a direct result of this punitive action. We know business has been tough particularly in the wake of the Covid-19 pandemic and any cut in revenue is likely to hit any institution hard. That is the hard reality.