MTN Cameroon on Wednesday transferred over CFA400 million (US$655,000) in subscriber security deposits to the National Deposits and Consignments Fund (CDEC), marking a key step in implementing reforms to improve transparency and financial oversight in the telecommunications sector.
The funds, which correspond to guarantees required when certain customer contracts are signed, are not payments for services but safeguards against unpaid bills or unreturned equipment, an official familiar with the transfer said. The deposits are normally refunded at the end of contractual relationships, unless contractual breaches justify deductions.
“This initial transfer signals the operationalisation of reforms under the law governing deposits and consignments,” the CDEC said in a statement, referring to Law No. 2008/003 of April 14, 2008, and Decree No. 2023/08500/PM of December 1, 2023. These legal instruments set out procedures for transferring funds held by private entities to the CDEC, effectively placing the state as a trusted custodian for such deposits.
The agreement signed on Wednesday defines “optimal conditions” for cooperation between MTN and the CDEC, including procedures for collecting deposits, transferring them, and reimbursing customers upon request. The framework aims to separate operating revenue from temporary cash holdings, clarifying accounting practices and reducing ambiguities in financial reporting.
Experts said the move enhances traceability and strengthens oversight in a process that can be sensitive when refunds are requested. “Security deposits may seem minor in everyday operations, but their mismanagement can create significant disputes,” said an analyst in Yaoundé. “Centralising these funds under the CDEC ensures both transparency for consumers and proper accounting for the operator.”
The initial transfer of more than CFA400 million, though not representing the total deposits collected by MTN Cameroon, illustrates the financial scale of such guarantees in the telecommunications sector, where managing payment risk and equipment allocation is central to the business model.
Under the new framework, consumers gain greater clarity on the purpose of deposits, the conditions under which deductions may be made, and the terms of reimbursement. For MTN, the structured mechanism provides a legally backed process to address unpaid bills while ensuring customer funds are safeguarded.
At the institutional level, the operation also tests the role of the CDEC as a trusted intermediary for funds originating from private companies. If extended to other sectors that rely on security deposits, the mechanism could formalise a broader circuit for consignments, with stricter standards of monitoring, transparency, and financial discipline.
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“This reform represents the transition from legal provisions to practical implementation,” said a CDEC representative. “It sets a precedent for other private firms holding refundable customer deposits, signalling a shift towards better governance and accountability in financial practices.”
The agreement reflects ongoing efforts by Cameroon’s authorities to improve regulatory oversight and safeguard consumer interests in sectors where upfront guarantees are customary. Telecom companies, like other service providers, often face risks of delayed payments or equipment loss, making such deposits a standard feature of service contracts.
Industry observers said the measure could strengthen investor confidence in Cameroon’s telecom market by formalising the handling of large sums of refundable deposits and ensuring a transparent, state-supervised process.
With the legal and operational framework now in place, the authorities and MTN Cameroon expect further transfers in the coming months, bringing additional funds under CDEC custody and enhancing both fiscal discipline and consumer protection.
