FRANCHIZE PARTNER DRAGS AIRTEL TO COURT AS MD MANOJ FACES JAIL OVER CONTEMPT OF COURT

Through his lawyers of M/s Turinawe Kamba & Co Advocates, the MD for MARTS JP CONSULT-SMC LTD (which is one of the more than 130 super agents through whom the telecom effects mobile money services) has dragged Airtel Uganda Ltd to the Commercial Division of the High Court. The court documents, That our reporter has glanced upon indicate that Manoj Murali (MD since October 2020) is going to have a more painful stay in Kampala than his predecessor V.G. Somasekhar.

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In their Civil Suit No. 727 of 2021, the plaintiff company officials invite court to comprehensively inquire into a range of wrongful acts occasioned by Airtel Uganda which (in places like Kampala) actually has a lion’s share of the mobile money deals with majority of the low income earners transacting through them.

MTN only beats them in upcountry because of the superior Ericson-supplied platform they use to facilitate mobile money transfers. The truth remains that majority find the MTN mobile money transactions way more user-friendly than Airtel’s. For instance it’s easier for MTN line owners to authorize mobile money withdrawals in favor of a recipient who is very far away from them than is the case with Airtel.

In its case papers, the plaintiff company (which has been a loyal franchise partner since 2018) faults Airtel Uganda of maliciously reorganizing and restructuring the geographical market that was originally assigned to them in a manner that diminishes their business operations leading to financial detriment. Having invested over Shs300m, the aggrieved company has been in the business of promoting the sale of a range of airtel products and services including mobile money operations for the last 4 years.

Specifically assigned the Nakasero II area and Mutungo in Nakawa Division, the company has over the years been serving more than 700 sub agents on behalf of Airtel Uganda within the assigned geographical locations. And all was well until sometime last year when Airtel allocated rival franchise partnership rights in a manner that competed and threatened the plaintiff company’s own business interests.

Having construed Airtel Uganda’s actions to be acts of unlawfulness and breach of contractual obligations, the aggrieved plaintiff company is imploring court to declare all the impugned acts of aggression illegal besides issuing a permanent injunction restraining Airtel Uganda from ever taking actions or steps that result into diminishing or threatening their business interest.

They specifically want court to declare that the defendant/Airtel Uganda unlawfully terminated their dealership contract in the affected areas and also award them Shs3bn in general damages which the offending Airtel Uganda Ltd (which has since filed its defense) must pay. The plaintiff company protests the Airtel Uganda acts as unreasonable because since being contracted into the franchise partnership on 13th day of November 2018, it’s officials, staff and employees have diligently participated in marketing, selling and distribution of its (Airtel Uganda) products and services in the areas of Nakawa territory specifically Mutungo and Nakasero II.

But before even the Commercial Division of the High Court finally disposes of the Main Head Suit, the lawyers representing the plaintiff company have resolved to commence contempt of court proceedings against the Airtel Uganda top bosses accusing them of overlooking the June 2021 court order (temporary injunction) that required the defendant company not to implement anything relating to termination or diminishing of the operations of MARTS JP CONSULT-SMC LTD until (another related suite registered as No. 338 of 2021) had been disposed of.

Yet inspite of all that clear court guidance, Airtel Uganda has continued to carry out alternations that have all amounted to interfering with the conduct of business by the plaintiff company.  It’s for such contempt of court behavior that the client MARTS JP CONSULT-SMC LTD has instructed their lawyers to rush to court and have the Airtel MD and other top officials declared contemnors and subsequently caged in Luzira or Kitalya prisons.

OTHER GRIEVANCES    

Beyond the plaintiff company’s complaint, Airtel Uganda is widely accused of acting imprudently regarding the restrictiveness with which it treats its franchise partners involved in facilitating mobile money transactions on its behalf. Whereas the MTN model encourages large sized franchise agents, whereby Mbiire/Bitature’s Simba Telecom can galvanize the whole of Buganda region as Minister Okello Oryem’s Tabley Telecom does the entire Northern, in the Airtel’s case the franchise market is too fractured. And the idea is to avoid a situation where one franchise partner becomes too powerful so as to threaten the powerful Indian expatriates calling shots at Airtel Uganda. That is how Airtel has 137 franchise partners covering the same Uganda-wide market where MTN has only 12 larger ones.

It’s only Keswawal, a wealthy trailers-owning Indian with a big presence in the transport and logistics sub sector, who the influential Indians at Airtel Uganda have allowed to loam large and have a significant geographical mobile money market under his franchise partnership. He is their great guy not only because he is personally well known to the Group global owners back home in India but also because he one time contributed Shs10bn towards resolution of a staff crisis that was imminent at Airtel. Shs10bn was required and this dude stepped forward to do the needful, a thing that strengthened his relationship not only with Airtel Uganda but globally.

As a result, the whole of Nakasero market territory has been preserved for his franchise partnership as has been the case with Jinja, Wakiso, Lungujja, Natete and the Entebbe neighborhood. It’s from this expansive territory that he makes up to Shs270m in commission per month at a time his other contemporaries are netting at between Shs4 and 10m. Also a close friend of Annit Kapul, Keswawal keeps between Shs5bn and 10bn invested in his Airtel money franchise dealership at any one point in time.

Tycoon Mandela is one of the newest entrants into the Airtel franchise partnership dealings and his entry has equally created some uneasiness in some quarters with some stakeholders perceiving this as an attempt to crowd out native Ugandans more.

There are also concerns that Airtel Uganda hasn’t adequately heeded local content requirements when it comes to permitting Ugandans employment in its top positions. Besides Board Chairman Hannington Karuhanga (not as powerful as Mbiire at MTN) and their power broker Major Herbert Ndiwalana, Sales Director Ali Balunywa and Legal Director Denis Kakonge are the only Ugandan natives in top management/sensitive positions. The rest, MD and all the others, are proud Indians. Majority Ugandans are middle level manager and below, a thing that is being contrasted with MTN Uganda where many powerful decision-makers are actually Ugandans including the MD Wim who has since become a Ugandan citizen and consolidated the same by marrying a Ugandan babe.

The law firm, Verma Jivram & Associates on which Airtel Uganda chiefly depends for legal services, is also perceived by many as Indian and not adequately Ugandan. Having a high level management team in which natives don’t feel adequately represented/empowered has culminated into a constrained work environment in which Ugandan managers don’t feel adequately empowered nor appreciated. This explains rampant staff departures with many realizing you can seldom rise beyond the position of middle level manager.

Only a few days ago, one of the Territory Business Managers (TBMs) eased out of the Airtel employment after being rebuked for being reluctant to delete a phone contact of one of the franchise partners who kept posting stuff one of the top management leaders construed as being hostile/not being flattering enough to the Airtel brand. The Ugandan TBM manager was being required to delete the offensive franchise partner from a networking whatsApp forum called “Core Marketing FP Group.”

Disgruntled Airtel insiders also talk of expatriate directors pocketing Shs39m in net salaries per month when their Ugandan counterparts earn merely Shs17m! Otherwise all this disgruntlement notwithstanding, Airtel Uganda (not listed) has continued making good money for its India-based shareholders because they are rapidly overtaking MTN on the voice sales market share leaving the South African telecom giant (soon listing) to consolidate its grip on countrywide mobile money transactions and data sales.

Numerically speaking, Airtel Uganda also continues to employ more Ugandans than MTN (though not paying them that handsomely) and also during Dorris Akol’s last year as CG URA, they emerged topmost taxpayer. This was largely because that year they had a lot of network expansion projects across the country requiring importation of a lot of heavy equipment on which heavy tax-paying obligations resulted. The fact that it outsources some of the work like IT services and network management (to ZTE a Chinese govt owned firm) deprives MTN Uganda of chance to employ larger numbers of people. Gratefully, the fewer numbers they employ are happier because of better conditions of work. Airtel Uganda seldom outsources work because they consider the same costly and detrimental to their profits.

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