VZCZCXYZ0016
RR RUEHWEB

DE RUEHMB #0286 3010607
ZNR UUUUU ZZH
R 280607Z OCT 09 (CCY AD00CD3114/MSI8834 510)
FM AMEMBASSY MBABANE
TO RUEHC/SECSTATE WASHDC 3746
INFO RUEHSA/AMEMBASSY PRETORIA 2742

UNCLAS MBABANE 000286 
 
C O R R E C T E D  C O P Y (ADDED SIGNATURE) 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECPS EINV PGOV WZ SF
SUBJECT: THE KING'S ECONOMY - CELL PHONE BUSINESS BENDS TO ROYAL 
POLITICS 
 
¶1.  (SBU) SUMMARY:  Royal politics and King Mswati's business 
interests appear to have caused the ouster of Mobile Telephone 
Network (MTN) CEO Tebogo Mogapi and halted parastatal Swaziland Post 
and Telecommunications Corporation (SPTC) from selling the MTN 
shares it owns to raise money for a Next Generation Networks (NGN) 
cell phone project.  Industry and press observers privately 
indicated that the king, who already owns many MTN shares, had 
wanted to purchase the MTN shares himself at a cheaper price than 
the buyer, MTN, was offering SPTC.  Government officials later 
prevented the sale, and recently did not renew the work permit for 
CEO Mogapi, a South African citizen, apparently in retaliation for 
his role in the transaction, as well as the CEO's reported decision 
to oppose government efforts to use the MTN network for electronic 
surveillance on political dissidents.  END SUMMARY. 
 
¶2.  (SBU) Royal politics and King Mswati's business interests appear 
to have caused the ouster of Mobile Telephone Network (MTN) CEO 
Tebogo Mogapi, a South African citizen, and halted parastatal 
Swaziland Post and Telecommunications Corporation (SPTC) from 
selling MTN shares it owns in order to raise money for a Next 
Generation Networks (NGN) cell phone project. 
 
¶3.  (SBU) The NGN is intended to support both fixed and mobile 
connectivity, and enable SPTC to deliver communication services 
regardless of geographic location.  SPTC planned to switch on the 
fixed mobile phone system on September 6, 2009.  To provide capital 
for the rollout, SPTC announced it would sell the 10 percent of MTN 
shares it held.  In July, the GKOS stopped the sale, claiming that 
SPTC did not keep government informed of its operational plans. 
Nevertheless, Prime Minister Barnabas Dlamini agreed that his 
government was aware of SPTC's 2007 strategic plan, which included 
information on the project. 
 
¶4.  (SBU) In 2007 the Swazi cabinet's Subcommittee on Public 
Enterprises (SCOPE) approved the implementation plan, including the 
sale of shares.  SPTC has already spent approximately USD 62 
million; sent people abroad for training; and ordered starter packs, 
SIM cards, and other cellular telephone-related equipment. 
According to a SPTC pricing officer, the company currently plans on 
financing the project through bank loans. 
 
¶5.  (SBU) Industry and press observers privately indicated to us 
that the king wanted to purchase the MTN shares himself at a cheaper 
price than the buyer, the Roodeport, Gauteng (South African)-based 
MTN company, was offering SPTC.  The South African firm reportedly 
offered twice what the next highest bidder did.  The king had 
previously been able to buy strongly performing MTN shares at a low 
price, and he reportedly was annoyed he was not given that 
opportunity again.  The Prime Minister, too, is said to have 
benefitted similarly from MTN's initial public offering. 
 
¶6.  (SBU) Embassy contacts and press reports suggest that GKOS did 
not renew the MTN Swaziland CEO's work permit as retaliation against 
the CEO for his role in the proposed share selling transaction to 
the highest bidder.  Other observers report that Mogapi also opposed 
government efforts to use the MTN network for electronic 
surveillance on political dissidents.  Publicly, government 
officials have loosely tied the decision not to renew Mogapi's work 
permit to "localization" efforts to support greater Swazi inclusion 
at high-levels in businesses. 
 
¶7.  (SBU) COMMENT: The government's halt of parastatal SPTC's sale 
of MTN shares demonstrates the impact the king's and other 
influential individuals' private business interests can have on 
business transactions in Swaziland.  Government officials would 
likely prefer a more malleable Swazi CEO at MTN who would cooperate 
more fully with royal and government wishes.  END COMMENT. 
IRVING