Macra ignores Minister, AG on Lacell licence

Malawi Communications Regulatory Authority (Macra) has bypassed its parent ministry and the Attorney General (AG) in re-awarding the controversial mobile phone operating licence to Lacell Private Limited.

Macra’s decision is in violation of the Communications Act of 1998 which established the regulator and guides its operations.

In separate interviews, Minister of Information, Tourism and Culture Kondwani Nankhumwa and AG Kalekeni Kaphale said Macra did not consult the two entities for guidance on its intentions to engage Lacell Private Limited as a mobile service provider five years after the authority had overturned the licensing due to the irregularities noticed then.

Sections 16 of the Communications Act 1998, under duty of the authority in respect of public telecommunication services, provides that Macra may, where necessary, seek the general direction of the minister as to the manner in which it is to carry out its duties.

The move to re-award the licence to Lacell Private Limited did not please telecommunication operators who have since written Macra director general Andrew Kumbatira asking him to reverse the decision.

In a letter dated May 3 2015, Association of Telecommunication Operators (ATO) comprising Access Communications Limited, Airtel Malawi Limited, TNM and Malawi Telecommunications Limited (MTL) asked Macra to ensure that the award of licence meets the principles and standards outlined in sections 20 (2) of the Communications Act 1998 requiring, inter alia, that licensing procedures must be objective, transparent and non-discriminatory.

The letter, signed by ATO president Willem Swart, reads in part: “The licence has been issued without proper procedure for the purpose as required under Section 20 of the Communications Act of 1998. We do not recall any recent gazette or press publication in which the authority invited applications for telecommunications licences.”

ATO observed that the current award was contrary to the procedure as required under Section 20 of the Communications Act 1998, and was externally influenced as it is based on an application that failed to meet criteria as published over five years ago.

On April 24 2015, Macra, under the General Notice Number 38, published a notice inviting public representation on the proposed licence to be issued to Lacell Private Limited.

Macra refused to comment on the allegations in an e-mail response, saying the matter was before the court.

On May 15 2015, the High Court in Blantyre granted Ian Nankhuni of TalkAWE an injunction stopping Macra from dealing with Lacell Private Limited regarding awarding of a fourth mobile licence.

The court document shows that former minister of Information Moses Kunkuyu directed Macra to start negotiating with Lacell Private Limited despite Lacell coming fifth—second from bottom—during the bidding process.

The irregularities in the awarding of the licence were first noticed in 2009 when the licence was first issued together as a fourth mobile operator with Expresso Limited,  which was also granted a licence as a fifth mobile operator.

Macra sought a legal opinion from Kaphale, then a private practice lawyer, to determine options on the way forward for the licensing of Lacell.

In response, Kaphale provided three options, including either upholding the April decision (to award the licence to Lacell Private Limited and Expresso) but he warned that the April Decision may be susceptible to challenge and did not seem to have been properly made.

In his recommendation, Kaphale advised Macra not to maintain the April decision.

He also said Macra could rescind its decision and cancel the awards.  However,  he said such decision  could  amount  to  a  premature  breach  or  termination  of  agreement.

In an interview, Kaphale confirmed writing the legal opinion when he was a private practice lawyer, but said the client had no obligation to follow his advice.

“Nobody reverted to me after my legal opinion and I have not been consulted now when the licence was being issued,” he said.

On his part, Nankhumwa said Macra has never informed him about the award to any new company.

He said ‘may be’ Macra was handling the matter at managerial level and that when the board feels the matter has reached the level of involving the parent ministry they will inform him.

In a letter dated July 21 2009, the then Macra board chairperson Thengo Maloya wrote that the standing practice was not followed when awarding licences to Lacell and Expresso.

Lacell Private Company was registered in Malawi on July 24 2008 under certificate of incorporation number 9137. It is owned by Bitmap Private Limited which holds 20 percent, Rafred Holdings Limited with 60 percent and Khartini Junaidi with 20 percent.

The majority shareholder, Rafred Holdings Limited, registered on July 24 2008 under company registration number 9136, is owned by Farook Sattar, Shama Gaffer and Saidi Jawadu.