Rwanda's telecom industry regulator has fined MTN Rwanda, a division of South Africa's MTN Group 7 billion francs ($8.5 million) for running its IT services outside the country in breach of its licence.
According to Reuters report, the regulator said in a ruling posted on its website that MTN Rwanda was hosting its IT services hub in Uganda, which it had prohibited.
"They are punished for relocating their IT services outside Rwanda, and this was deliberate," Rwanda Utilities Regulatory Authority Spokesman Anthony Kulamba said.
MTN Rwanda says it is the central African country's leading mobile operator, with 4 million subscribers. It is 80 percent owned MTN Group while the remaining 20 percent is listed on the Rwanda Securities Exchange.
MTN Group said it had also received a notification about the fine.
"MTN has been engaging with the regulator on this matter over the past four months. MTN Rwanda is currently studying the official notification and will continue to engage with the regulator on this matter," it said in a statement.
Last year, MTN, which operates in 20 countries, set aside $600 million to pay a fine imposed by the Nigerian government for not disconnecting unregistered SIM cards. It paid 30 billion naira ($95.24 million) of this in March.
Other telecoms companies operating in Rwanda are Tigo, a unit of Millicom and Airtel Rwanda, a unit of India's Bharti Airtel.
MTN in Contractual Dispute
In 2015, Reuters reported that a court in Uganda ordered the South African telecoms giant MTN Group to pay $622,000 to a smaller industry rival that accused it of using a dominant position to stifle its business.
With about 11.7 million subscribers, MTN Uganda is the east African country's leading telecoms company, in an industry of some seven players.
MTN terminated a data transmission contract with Ezeemoney, a mobile money firm, in 2013, saying it was a direct competitor.
"The court found that MTN's conduct was unlawful and caused loss by unlawful means and awarded Ezeemoney general and punitive damages," said David Mpanga, a lawyer for Ezeemoney.
MTN acknowledged losing the case against Ezeemoney in a verdict delivered by Uganda's High Court on Nov. 6, 2015 but said it was appealing the verdict.
First Annual Loss in 20 Years
March this year, Africa's biggest mobile phone operator MTN Group swung to its first annual loss in two decades.
MTN said its headline loss came in at 1.4 billion rand ($108 million), or 77 cents per share last year, with headline earnings of 13.6 billion rand, or 746 cents per share, in 2015.
Founded with Pretoria's help after the end of white rule in 1994, MTN is seen as one of post-apartheid South Africa's biggest commercial successes but clashes with regulators in recent years have exposed governance issues and hobbled growth.
MTN, which has operations in Iran, said it expects to add 8.3 million new users in the 2017 financial year, a document handed out at its results presentation showed.