UNCLAS COTONOU 000447

SIPDIS

SENSITIVE

SIPDIS

DEPT FOR AF/EPS: KRZYWDA, AF/W:BANKS, EB/TPP/ABT:LERSTEN
DEPT PASS TO COMMERCE: MD'ANDREA AND USTR: AHEYLIGER/LAGAMA
PARIS FOR D'ELIA
DAKAR FOR FCS AND FAS
KAMPALA FOR FLINTROP
LONDON FOR HAHN

E.O. 12958: N/A
TAGS: ECON ECPS PGOV BN
SUBJECT: BENIN: GOVERNMENT TIGHTENS REGULATION OF GLOBAL SATELLITE
MESSAGING (GSM) PROVIDERS

REF: COTONOU 440


1. (SBU) SUMMARY: As part of an ongoing effort to rein in the
country's freewheeling cell phone industry, the Government of Benin
announced on June 20 that two major global satellite messaging (GSM)
service providers would face revocation of their operating licenses
if they did not immediately conform to new regulations. Recent
measures to regulate the cell phone service industry more strictly
include a sharp increase in fees, stricter regulation of name
changes, and suspension of certain services. President Yayi and
the new government he appointed on June 17 (REFTEL) appear to be
sending a message that they will not tolerate what they see as
corrupt or shady business practices. END SUMMARY.


2. On June 20, two newly-appointed Ministers (Communications and New
Technology Minister Desire Adadja and Institutional Relations and
Government Spokesman Alexandre Hountondji) announced that two major
Beninese GMS service providers, Moov (formerly Telecel) and MTN
(formerly Areeba), would have their operating licenses suspended
within twenty-four hours if they did not immediately conform with
relevant laws and regulations. In particular, the GOB expressed
concern over the frequent name changes of GSM companies. The
government says the name changes are often done without the required
paperwork being filed and may be undertaken to help mask illegal
activity. Another recent regulation was the government's June 6
decision to increase the licensing fees for GSM providers from USD
1.02 million (5 billion Francs CFA) to USD 6.12 million (30 billion
Francs CFA). The new fees are to be paid in full and in cash. GSM
providers already operating in the country are required to pay the
difference between whatever fees they have already paid when they
began operating and the current amount. Depending on when the
operator began business, the fees they have already paid would range
between $240,000 and $1.02 million.


3. The GoB's crackdown on mobile phone services began after a
GoB-commissioned report in late 2006 found that GSM providers
operating in Benin were making huge profits while avoiding paying
fees and ignoring regulations. On January 18, 2007, the GOB
suspended certain services, such as Voice-Over-Internet Protocol
(VoIP), WiFi (Wireless Fidelity), WiMAX (Worldwide Interoperability
for Microwave Access) and Asymmetric Digital Subscriber Lines
(ADSL), on the grounds that the GSM service providers had offered
these services without prior authorization and licensing by the
GOB.


4. Many mission employees use Moov and Areeba for cell phone
service. Post management has obtained a number of alternate cell
phone numbers for certain key employees with unaffected GSM
providers, in case Moov and Areeba see their service suspended.
These numbers have been provided to the Ops Center.


5. (SBU) COMMENT: The GOB's announcement represents its latest
effort to reign in what many believe is a free-wheeling and scofflaw
cell phone service industry. Specifically, the GOB says it wants to
bring licensing fees paid by the companies to a level similar to
that paid in other countries in the region, and to insure that the
companies have sufficient capacity to guarantee good quality service
and future investment in Benin. In addition, President Yayi and his
newly-formed government may be attempting to send a clear and
unequivocal message that corruption, flaunting of existing laws and
regulations, and shady business practices will not be tolerated.
END COMMENT.

BROWN