Why are Ugandan Authorities Deporting Key Executives of MTN Uganda?

Lately, MTN Uganda has been having a nasty confrontation with the Ugandan government. Now several reports making the rounds suggests that MTN Uganda CEO, Wim Vanhelleputte, has now been deported.

What’s this we are hearing that telco MTN Uganda’s CEO Wim Vanhelleputte was dragged to the airport in handcuffs and is likely to be deported? Are the vampires finally moving to seize MTN? This is the 3rd MTN senior manager deported in a few days.

— Charles Onyango-Obbo (@cobbo3) February 14, 2019

Mr Vanhelleputte’s deportation makes him the fourth MTN executive in Uganda to be shown the door out of the country. The previous three executives are Chief Marketing Officer, Olivier Prentout; head of sales and distribution, Annie Bilenge Tabura; and Franco-Italian citizen and general manager for mobile financial services, Elsa Muzzolini.

These three executives were deported between January 20 and 23.

Now it’s not clear how these cases are connected. However, a police statement accused Mr Prentout and Ms Tabura of acts which “compromise national security.” While Ms Mussolini was under investigation for “inciting violence” before she was deported.

But, according to some local news sources, MTN Uganda CEO, Mr Vanhelleputte, was deported because he was “speaking to people who had been deported.” Mr Vanhelleputte, who was married to a Ugandan woman, held permanent residence status in Uganda. But the Ugandan government waived this status and summarily deported him as “prohibited immigrant”.

Following his deportation, MTN Uganda has appointed Gordian Kyomukama, the company’s Chief Technology Officer, as interim CEO.

How the crisis began

Mr Vanhelleputte’s deportation is the latest development in the crisis between MTN Uganda and the country’s government.

https://technext.ng/2019/02/12/ugandan-police-fight-crime-gemaltos-biometric-identification-system-but-could-also-used-govt-oppression/

But, according to sources, the crisis began in July 2018, when the country’s security personnel invaded an MTN Uganda data center. Reports suggest the Ugandan police was investigating the company for espionage.

https://twitter.com/UgandanzC/status/1096989160727109633

Meanwhile, MTN Uganda wrote a letter to authorities about the incident, claiming their move was illegal and led to the “disconnection of four information servers.”

It gets even worse….

The situation got worse for MTN Uganda because in October 2018, their operating license eventually expired despite numerous requests, some as early as 2017, to renew.

MTN Uganda fights to renew license amid claims of unethical practices and anti-competitive behaviour https://t.co/qvwpms6AAB

— Steve Song🇨🇦🇿🇦 (@stevesong) January 15, 2018

The last quarter of 2018 witnessed a tough struggle as the telco went through difficult times just for license renewal.

The countries telecom regulatory body, Ugandan Communications Commission (UCC), asked for $100 million as the renewal fee. But MTN was only willing to cough out $22 million.

The firm explained it couldn’t afford to pay much because it was stockpiling for significant investments over the next 10 years.

Following a period of negotiations, both parties agreed on a $58 million licensing agreement.

Presidential intervention and deportations

But that didn’t sit too well with Uganda’s president, Yoweri Museveni. In a letter on 15 January 2019, he berated the UCC for accepting that amount.

“I am… astonished by UCC’s proposal of a renewal fee of $58m, far less than the $100m it has originally set,” he wrote.

Museveni ‘astonished’ MTN Uganda allowed to pay less for licence renewal https://t.co/7vYEpZpXLY

— Business Day (@BDliveSA) January 15, 2019

“I am hereby directing both of you to protect the interest of both the country and investor by ensuring that you scrutinise the process and involve Finance and the tax matters. I expect a quick resolution and an update in 14 days.”

It was during this period that the government began serious crackdown on MTN executives and the deportation of key figures.

President Museveni had been very vocal in his demand for MTN Uganda to list on the Ugandan Stock Market.

KAMPALA (Reuters) – Ugandan President Yoweri Museveni said telecom firm MTN Uganda needs to sell shares on the local stock exchange to facilitate domestic ownership of the company and ensure more of the money it earns stays in the country. https://t.co/iaXaVac533

— Omar Mohammed (@shurufu) January 24, 2019

This he believes will facilitate domestic ownership of the telco and retain most of the money it earns in the country.

For now though, the government is yet to make any statement. We’ll keep monitoring the situation.