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Telecom

MTN Uganda ordered to pay UGX 51bn license fees

The High court in Kampala has ordered MTN Uganda to pay the UGX 51 billion ($14.14m) license fees it owes Uganda Communications Commission (UCC). The fees in question were for the period between October 2018 and June 2020 when negotiations for a new license were ongoing. This is a period during which MTN didn’t have a running telecom license which had expired in October 2018.

Background to the MTN license matter

October 2017: MTN applied to UCC for a renewal of its second national operator license which was due for expiry in October 2018. The regulator determined that the renewal fees for the applicant license would be $51 million for the telecom company to continue operating under the second national operator license terms and conditions.

November 2017: UCC deferred the issuance of the renewed license to allow for the alignment with internal government processes. It extended MTN’s operations of the license for a maximum period of 60 days from November 21, 2018.

The period was further extended on March 21, 2019, to ensure continuity while negotiations over the new license progressed. Further extensions were made until 30th June 2020. Court records indicate that on 18th March 2020, UCC communicated its decision to renew the license for a term of 12 years from July 1, 2020.

July 2020: UCC writes to MTN Uganda indicating that the telco would be required to pay license fees for the transition period. The demand notice indicated over Shs 51 billion. MTN responded in disagreement with the premise on which the regulator had assessed the fees payable.

MTN Uganda goes to court

In disagreement, MTN Uganda ran to court seeking an injunction restraining UCC from implementing its decision and in any way interfering with or interrupting MTN operations. The telco asked the court to prohibit UCC from unilaterally determining and levying the license fees for the transition period saying they are not prescribed by law.

UCC, in defense, argued that the figure was reached after consultation and a directive from the president was issued to that effect. According to UCC, MTN had been asked to sign for a new license for 14 years including the two years of transition from 2018 to 2020. However, the company instead decided to sign for 12 years on an understanding that a separate fee of UGX 51 billion was to be paid on a prorated basis for the transition period.

In his decision delivered electronically, Justice Musa Ssekaana ruled that there was “no procedural impropriety in the decision made by UCC in imposing transition fees based on a pro-rated assessment.” He adds that the fee was fairly arrived at and guided by the amount paid for of $100 million a year.

Source: The Observer

MTN Uganda ordered to pay UGX 51bn license fees
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