Problematic of liquidation and dissolution of companies under rwandan law: case study of Rwandatel

II.3.3.3. Causes of Rwandatel's mobile license revocation

The committee established by RURA, after analyzing the technical and financial situation of Rwandatel S.A noticed that Rwandatel failed to comply with its license obligations as agreed and described in the Fixed and Cellular Mobile licenses that were granted to Rwndatel S.A in 2008.^101(*) That matter of non compliance has made the Ad hoc Monitoring Committee to write to Rwandatel official letters many times.

That committed based on article 18 of both Mobile and Fixed License, whereby Rwandatel had the obligation to install, operate and maintain the Licensed Network and provide the Licensed Services in all localities and was to do so in accordance with the minimum requirements set in the Appendix E; in addition to that it was obliged to submit to RURA a semester report on the progress made in regard to rollout and coverage obligations^102(*). Regarding this point, the inspection over three years demonstrated that Rwandatel was far away of achieving its targets as per its coverage and roll out plan.

In accordance with article 28 of Law N. 44/2001 of 30/11/2001 governing telecommunications and Presidential Order N.05/01 of 15/03/2004 determining the functioning of the Universal Access Fund and Public Operator's contributions in its article 29, states that each Telecommunication Operators has the obligation to pay 2% of Turnover for the contribution to Universal Access Fund^103(*).

Rwandatel had the same obligation under Article 38 of its license requesting it to pay to RURA an annual contribution to the Universal Access Fund within one month after the end of financial year on the basis of the turnover generated during the previous yea^104(*)r. However, Rwandatel didn't pay that fee as it was required by the law and it licenses

Basing on the article 20 of its mobile and fixed licenses, Rwandatel had the obligation to meet the QoS as was provided in its license and had the obligation to install an effective quality monitoring system and to provide RURA with the result of measurement of QoS on quarterly basis^105(*). The fact that Rwandatel was not investing as planned, led to a poor quality of service especially in its internet service provision where it was experiencing the congestion of its 3G Network in Kigali City.

In accordance with article 20.6 of its license, Rwandatel had the obligation to notify RURA of the occurrence of any fact or event likely to materially affect the Licensee's ability to comply with any term of the license including any change to the network which might detrimentally affect the performance, availability or quality of the network or the services; and any insolvency related event in respect of the Lincensee or any preparatory steps being taken that might lead to an insolvency related event, immediately upon the Lincensee becoming aware of the event^106(*).

The report of external auditor of Rwandatel showed that the company was insolvent and that it was at a very high risk of bankrupt if the shareholders were not to inject more money in the company in order to redress the situation. However, despite that report, Rwandatel did not informed RURA from its own volition of all those events as it was requested by the license. That was proven by the fact that till then, Rwandatel Management were arguing that their situation was not such alerting that it would be resolved soon.

Basing on article 6 of the Presidential Order N. 04/01 of 15/03/2004 determining Specific Duties of the Regulatory Board in Telecommunications Matters giving the Board the responsibility to give the general advice and to offer assistance to operators including as regards the resolution of disputes^107(*); RURA received a complaint from MTN Rwanda which was relating to a pending dispute related to outstanding debt accrued from interconnection fees by Rwandatel as per the terms of interconnection agreement signed by the two companies.

RURA assisted the two companies to solve the issue amicably, and Rwandatel has requested to pay in installment but it failed. After many tentative of solving those issued without success, MTN had lodged its complaint to the court.

Alongside MTN, there were other creditors of Rwandatel because according to its financial analysis the liabilities of Rwandatel (around RWF 37 Billions) were almost three times its assets (around RWF 13 Billions). This was proving how Rwandatel was over-indebted.^108(*)

* ¹⁰¹Ibid.

* ¹⁰² Rwandatel Mobile and Fixed License, art. 8.

* ¹⁰³ Presidential Order N. 05/01 0f 15/03/2004 determining the functioning of Universal Access Fund and Public Operator's contributions, art.29, OG, n^o 30/03/2004.

* ¹⁰⁴ Art.38 of the same order.

* ¹⁰⁵Art.20 of the same order.

* ¹⁰⁶ Rwandatel Moble and Fixed License, art.20.6.

* ¹⁰⁷ The Presidential Order N. 04/01 of 15/03/2004 determining Specific Duties of the Regulatory Board in Telecommunications, art. 6

* ¹⁰⁸ RURA Legal Affairs Directorate & Ad Hoc Monitoring Committee, Report on Rwandatel Performance, p.13.