MTN Uganda gets temporary license as negotiations carry on

MTN Uganda gets temporary license as negotiations carry on

MTN dominates the Uganda mobile telephone market, boasting more than half of the country’s total subscribers, estimated at about 22 million. (Courtesy image)

Telecommunications company MTN Uganda has been given a provisional license which will last two months or 60 days as authorities continue to negotiate over the fees the telco is supposed to pay to the National Treasury.

This becomes the second interim license MTN is getting since its 20-year license expired in October 2018.

Government delayed MTN’s license renewal, calling for an extensive probe into the company’s operations. Though MTN denies the accusations, it has been blamed for under-declaring its revenue hence paying unfair taxes and repatriating most of its profits.

When an ample probe by the Internal Security Organisation (ISO) revealed to President Museveni that MTN was presenting underhand figures for call volume and profits, the head of state wrote a lengthy missive demanding explanation as to why the communications regulator had reduced the licensing fees MTN was supposed to pay for its forthcoming 10-year license from US$100 million to $50 million.

New broadband policy

In 2018, the government rolled out a list of requirements a telecom company must meet before acquiring an operational license in Uganda.

One of the requirements is that a telco should deliver 3G coverage across the country and at least 4G network in urban areas.

As it objects the fees government wants to impose on it, MTN says to achieve the above requirements, it will require more investment in infrastructure and the UCC executive director who defended MTN’s argument says the investment figure is about $300 million.

The director also says that MTN’s investment in the said infrastructure, which is supposed to happen in the next two years, is more valuable that paying the suggested license fees.

“We’re going into different technologies now; we need a lot of investment. The networks are changing… people are moving away from voice to data… so you cannot sit as a country and leave things to pass by… so we have to be ready to absorb what’s happening now in other countries,” said Eng. Godfrey Mutabazi in a recent interview with NTV.

Mutabazi also argues that by charging a lot of fees on telecoms, the government is also directly putting a lot of burden on her citizens since the companies will create means of recouping that money.

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“Any figure you apply to the operator will be passed on to the consumer… that’s a simple theory; they cannot just put in 58 to 100 million and just lose it… no, it’ll be passed over.”

He, however, confirmed that the negotiations for MTN to get its license were going on well and could be concluded in a month.

“We’re moving on very well and we believe that within a space of 30 days, maximum, we shall have finalized all the negotiations and the details of the license obligation”

MTN dominates the Uganda mobile telephone market, boasting more than half of the country’s total subscribers, estimated at about 22 million.

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