MTN Uganda fights for its license

GYAGENDA KABUUBI

In a period of four months, Uganda Communications Commission (UCC) will decide whether to renew the operation license for telecom giants, MTN Uganda.

Managed by a South Africa based multinational mobile telecommunications company that operates in a number of countries in Africa, Europe and Asia, MTN Uganda begun operating in Uganda in October 1998, revolutionising the telecommunications industry in the country.

It was granted the National Telecommunications Operator (NTO) license on April 15, 1998 but opened shop on October 20, 1998.

This was after the South African based firm had paid bid amount of $5.8m (Shs 20.8billion) and the initial fee of $200,000 (Shs 720m).

On Monday, UCC conducted a public hearing under Section 43 of the Uganda Communications Act and Article 3 of the National Telecommunications Operator License, as part of the requirements for the renewal of the company’s license.

However, an evaluation report dated March 13, and signed by UCC Executive Director Godfrey Mutabazi, there are a number of outstanding issues that could delay the renewal of the MTN Uganda’s operating license.

The report covers the years 2008 when MTN launched its operations in Uganda to date.

Although the license was supposed to be reviewed on October 20, 2003, five years after it opened in Uganda, the process was delayed until 2005 when UCC carried out the first evaluation on MTN.

The evaluation found out that by end of five years, “MTN had duly complied with financial and legal obligations, and covered most of the technical obligations.”

On October 3, 2017, MTN Uganda applied for a single term renewal of its operating license for another 10 years ahead of the expiry of its current license on October 20, 2018.

Report at a Glance

Named ‘Evaluation report on MTN Uganda’s license performance from 1998-2018’, the report highlighted that whereas MTN has to a large extent complied with most of its license and regulatory obligations, there are a number outstanding areas of non-compliance with the Commission arguing that the shortfalls are hampering the progress of renewing its license.

For instance, MTN is faulted for suffocating competitors such as One Solution Ltd and Sure telecom by delaying or denying them interconnection.

Despite being listed among the top tax payers in the country, UCC also accuses MTN of defaulting on payment of spectrum fees.

According to the evaluation report, MTN has on two occasions refused to honour its financial obligations leading to a Shs 27.9m Spectrum fees debt.

MTN however argued that the invoices for the said fees had been contested at the time and that they had made payment towards the subject of the said invoices.

MTN further argued that at the time, all operators objected to UCC calculation of spectrum fees and in their letter dated September 26, 2006, they outlined the details of their objection.

The telecom company also accused UCC of not responding to their letter which made them (MTN) to assume that UCC had dropped the subject invoices.

UCC also faults MTN for ignoring customers’ complaints much as they were brought to the company’s attention, and went as far as “deliberately” refusing to inform the regulator about the incidents, something that UCC says is against the UCC Act.

For instance, between June 16, 2014 and November 7, 2014, more than 360,000 incidents of erroneous billing were recorded by MTN’s data customers, but the telecom company washed the concerns below their carpet not until when UCC put the matter before the company, forcing them (MTN) to pay out reimbursements of more than Shs 770m to the affected customers.

MTN is also accused of ignoring the urgency of the complaints raised by customers. Many of such complaints remain unresolved thus falling below the threshold set out in the quality service parameters. “The Commission notes that on average, MTN has in the last two years only managed to resolve 76.5% of the complaints within the stipulated timelines,” the report reads in part.

MTN was also accused of continuously sending out unsolicited messages without opt out information, contrary to a directive issued by the regulator on August 29, 2014 as well as on October 3, 2014 and on November 14, 2014 to all telecom companies.

“The Commission has however found out that contrary to MTN’s claim that it fully complied with this directive, MTN only applied this directive to third party content providers and not MTN’s own unsolicited messages,” the report states.

UCC went further to send a warning message to the telecom company but MTN remains non-compliant.

The report also accused MTN of continuously charging domestic interconnect fees of Shs115 against UCC’s standard fee of Shs112 which variance, the report stated, MTN failed to justify.

The assessment also revealed that over the years, MTN has continued to use short codes without first obtaining requisite assignment and authorization from UCC.

Even when the UCC Act requires MTN to seek for approval certificates and license before selling and installing telecommunication equipment, the evaluation found that MTN has fallen short of this requirement.

MTN defended itself against the accusations arguing that UCC had approved all its equipment, something the regulator denies saying that MTN didn’t fulfill this particular requirement prior to 2015.

UCC noted that MTN has on several occasions failed to implement the regulator’s directives, a thing that amounts to breach of license.

“This does not only amount to breach of license agreement but leads to failure to realize the sector objectives,” the report says.

STABLE NETWORK

Mutabazi however praised MTN which he said that has to a larger extent provided uninterrupted telecommunications services over a 20-year course of its NTO license, and has also seen its revenues grow up to Shs 1.3trillion.

During the public hearing, MTN Uganda Chief Executive Officer Wim Vanhelleputte pledged to remain the most trustworthy, consistent & reliable partner of development in Uganda.

Vanhelleputte said, despite being the third entrant in the Ugandan market after UTL and Celtel (Airtel), MTN became the market leader after only a year.

He said, the company targets to grow its data usage up to 95% by 2020 from its current 50%.

 “As coverage continues to grow, then so will the internet costs, MTN will be an enabler in the digital economy-cashless through MTN Mobile Money, financial inclusion and innovation,” Vanhelleputte said.