UPDATE 1-South Sudan suspends Vivacell's mobile network over unpaid licence fee

(Updates with company statement)

JUBA, March 28 (Reuters) - South Sudan shut down mobile operator Vivacell’s service overnight, demanding $66 million in licence fees and locking out 900,000 subscribers.

Vivacell, owned by Lebanon’s Fattouch Investment Group, is one of three mobile phone operators in South Sudan - competing with South Africa’s MTN and Kuwait’s Zain.

Last week, the government gave the company seven days to comply with unspecified rules and regulations and pay its licence fee or its operations would be shut down.

“They have no licence. We want them to pay a sum of 66 million dollars for their licence and up to now they have not paid,” Information Minister Michael Makuei Lueth told Reuters late on Tuesday.

International traffic had already been switched off last week, angering customers.

“It is abrupt and it has disorganised my business communication. I am losing contact (with overseas suppliers) by switching to another line, which is very painful,” said Khalid Ramadhan, a Juba businessman who imports mobile phones and computers from places like Dubai.

Vivacell’s managing director, Jesus Antonio Ortiz Olivo, said company officials went to Makuei’s office this week to try to discuss the situation but the minister would not meet them.

“We are still working on it as of now. I cannot say anything in regards to the shutting down by the honourable minister,” Ortiz Olivo told Reuters.

The company said on Wednesday it was engaging with the “relevant authorities” to ensure the network was restored in the shortest time possible.

“In the unfortunate event the network is not switched back on, Vivacell will duly provide for a clear mechanism for re-imbursement of the cash equivalent of the airtime and simcard stock currently being held by all the dealers,” it said in a statement.

At midnight on Tuesday, the network signal on the mobile phones of Vivacell customers went off, making it impossible to receive or make any calls.

Vivacell accounts for nearly a third of up to 3 million mobile subscribers in South Sudan, which has been torn by civil war since 2013. Some of its customers were already planning to switch to another service provider.

One Vivacell subscriber, who did not wish to be named, said MTN was likely to be the biggest beneficiary of the switch-off, leading to congestion on the network.

“Vivacell should expedite means of resolving the differences with the government for the sake of the users,” the customer said. (Reporting by Denis Dumo; Writing by Duncan Miriri; Editing by Susan Fenton and Mark Potter)