Airtel to further pursue in court CFTC’s order to pay K2.1bn fine over Khethekhethe bonus scheme

Airtel Malawi Plc Managing Director Charles Kamoto 

*The company denied the charges levelled against it when it appeared before the CFTC

* Airtel does not agree with the consequential decision as it fully complies with the relevant and applicable laws

* The company has not committed any unfair trading practice or provided any misleading, false or deceptive information

* Or made false representation to the public—Airtel Managing Director Charles Kamoto

By Duncan Mlanjira

Airtel Malawi Plc has responded to the decision by the Competition and Fair Trading Commission (CFTC) which ordered the company to pay K2.1bn for what was described as ‘unreasonable’ behaviour to customers over Khethekhethe loyalty bonus programme.

In a statement after CFTC’s determination made on Wednesday (September 29), Airtel Malawi’s Managing Director, said the company “denied the charges levelled against it” when it appeared before the CFTC and “does not agree with the consequential decision”.

“The Company is pursuing the matter further in court,” Kamoto said in the statement. “Airtel complies and continues to fully comply with the relevant and applicable laws and has not committed any unfair trading practice or provided any misleading, false or deceptive information or made false representation to the public.

“We wish to reiterate our commitment to conducting business within the applicable legal and regulatory framework and continue to deliver reliable and value-adding services,” Kamoto said in the statement.

CFTC has ordered Airtel Malawi to pay the penalty for allegedly flouting regulations by “engaging in unconscionable conduct” with respect to the rewarding of the Khethekhethe bonus.

CFTC acting executive director Apoche Itimu issued a statement that they launched an investigation on September 16, 2021 following several complaints from consumers, alleging Airtel stopped automatically crediting into customer accounts with monthly bonuses.

According to the complaints to CFTC, customers were required to apply for the redemption of their bonuses on the 14th of every month but they were being forfeited if they were not redeem.

Itimu said it was further alleged that the unredeemed bonuses were later appropriated and sold to other customers on the 15th and she she claimed that Airtel Malawi made a financial gain of about K2.1 billion, thereby acting “unreasonably and without conscious.”

“The Commission, therefore, ordered Airtel to pay a fine of K2,113,099,660 for engaging in unconscionable conduct in the trade of goods and services” as representing financial gain generated from the offence” as said by Itimu.

Airtel introduced the Khethekhethe loyalty bonus programme on March 1 this year, in which customers were able to instantly redeem KhetheKhethe airtime royalty bonus when they make a call, buy a bundle or use internet worth K1,000 and above.

The past bonus reclaim system was through customers dialing *600# on the 14th of every month.

The KhetheKhethe service, according Airtel Malawi comes with more rewards to customers on any day of the month that they transact in which — after buying airtime or data of K1,000 and above (in multiples of K1,000) — the customers are meant to get a notification SMS that they have received their instant bonus.

Khethekhethe, according to Airtel, involves using airtime to browse the Internet (data bonus of 100MB valid for a day); buying a data bundle (data bonus of 100MB valid for a day); using airtime to make a call (coming with a voice bonus of five minutes Airtel to Airtel) and buying a voice bundle (also with voice bonus of five minutes Airtel to Airtel).

Headquartered in Lilongwe, Airtel Malawi Plc is one of the country’s leading mobile service providers offering 4G/LTE, 2G and 3G wireless networks and and high speed flat broadband internet services.

The subsidiary of Airtel Africa Plc — a Pan-African telecommunications company with operations in 14 countries across Africa — also offers the largest mobile commercial service in the country through Airtel Money which was launched in Malawi in February 2011.

The CFTC was established under the Competition and Fair Trading Act of 1998 with a mandate to regulate, monitor, control and prevent acts or behaviours which would adversely affect competition and fair trading in Malawi.

Any person may lodge a complaint against unfair trading practices with the Commission, at no charge and is mandated by law to investigate unfair trade practices including violations of consumer rights and is tasked to taking all necessary steps to facilitate redress.

The Commission is also mandated to handle complaints and investigates restrictive business practices.