Uganda's telecommunications regulator said on Wednesday it was setting up a committee to investigate the local unit of South Africa's MTN Group after uproar on social media about its mobile money policies.
This week dozens of MTN's subscribers in Uganda took to Twitter to accuse it of making it nearly impossible to cancel a mobile money transaction made in error.
As in neighbouring Kenya, mobile money use has grown rapidly, fuelled by the low penetration of banking services and the inability of many people to access loans or other products from banks.
The system enables people to transfer cash and make payments on cellphones without a bank account.
A spokeswoman for MTN Uganda said the company had internal policies for money sent in error. So long as the money had not been withdrawn at the other end, cash could be frozen after a subscriber informed them of an erroneous transaction. Then after some checks it could be returned.
If the wrong recipient had already withdrawn the money, then "the customer would be advised to negotiate with the person [wrong recipient]," said MTN spokesperson Justina Ntabgoba.
Uganda Communications Commission (UCC) executive director Godfrey Mutabazi said he was setting up an investigation.
"MTN is in the process of renewing their license and we want these matters to be sorted before we do that," he told Reuters.
MTN Uganda's 20-year licence, secured in 1998, expires in October.
According to the regulator, nearly all of Uganda's 24 million mobile subscribers also have a mobile money account.
The firm is Uganda's biggest telecom concern, followed by India's Bharti Airtel.
The Twitter criticism was set off on Sunday by a university lecturer who tweeted that he had made a mistake while trying to send money to a friend for funeral expenses.
When he called the company and asked for the transaction to be reversed, he was told he needed a court order to claim the money from the recipient.