Afrimax's Vodafone Zambia Gets Its Marching Orders

Zambia's communications authority has cancelled the license awarded to Vodafone Zambia's local franchise holder, Mobile Broadband Ltd., citing a lack of technical and financial capabilities.

The Zambia Information and Communications Technology Authority (ZICTA) said in a statement on its website that it had cancelled the network and services licenses issued to Mobile Broadband Limited, a part of the Afrimax Group that was trading as Vodafone Zambia.

"The cancellation is on the grounds that Mobile Broadband Limited has ceased to fulfil the eligibility requirements under Section 12 of the Information and Communications Technologies (ICT) Act No. 15 of 2009 by not being technically and financially capable of meeting the obligations and the terms and conditions of the license," the authority said in a statement signed by board chairperson Emmanuel M. Musonda.

The cancellation will take effect on October 20, 2019.

In June 2016, Vodafone signed a partner market agreement for Zambia with Afrimax Group, a 4G telecommunications operator in sub-Saharan Africa which was registered as Mobile Broadband in Zambia. Under the non-equity agreement, the two companies agreed to offer customers 4G data services using the Vodafone Zambia brand.

Reuters quoted Vodafone saying it had terminated its agreement with Afrimax back in April 2018, "and had no ongoing relationship with the company."

According to Reuters, Afrimax has lately been experiencing operational problems and issued a statement in July saying its shareholders had failed to recapitalize it.

ZICTA said that the frequency bands that were assigned to Mobile Broadband Limited have been withdrawn along with the license.

"The Authority is aware that the cancellation of the licenses held by Mobile Broadband Limited comes with great inconvenience to a lot of consumers that have subscribed to the network. We expect that Mobile Broadband Limited will address all consumer issues as a result of this cancellation," ZICTA said.

According to the Lusaka Times, the Vodafone Zambia business was due to be sold to new owners at the end of August 2019. The local publication in July quoted a company spokesperson saying that "the withholding of funds by shareholders of the holding company - Afrimax Holdings BV - in 2017 led to the company undergoing financial distress which led to employees petitioning the court for Business Rescue while it embarked on a process of obtaining new shareholders."

The Afrimax Group also ran the Vodafone Uganda brand but it ran into financial difficulties and filed for bankruptcy protection in March 2018. (See Vodafone Uganda Files for Bankruptcy.)

The exit of Vodafone Zambia will have little impact on the dynamics of Zambia's mobile market of about 15 million users, which is dominated by MTN and Airtel.