The licence fee offered by the Uganda Communications Commission to MTN Uganda has been called into question, after the country’s network regulator charged the telecom company higher than the licence fee recommended by Uganda’s cabinet.
Uganda’s communication body increased the 10-years licence fee to $118 million from the proposed $100 million. This didn’t go down well with MTN Uganda, resulting in a letter written to the regulator questioning how the fee was reached.
Why UCC increased the licence: On the network regulator’s part, the renewal licence fee was reached based on MTN’s projected annual gross revenue. According to report, the country’s Ministry of Finance made the estimate.
Other option for MTN Uganda: While MTN Uganda is not pleased with the $180 million renewal licence, the commission said the telecoms company has an option of renewing its licence for 15-years at the rate of $150 million.
MTN Uganda‘s operating licence expired in October 2018 after it was first issued in 1998 for a 20-years run. But there have been back and forth negotiations, which have resulted in a temporary renewal — which is expected to expire in May.
The report disclosed MTN Uganda is waiting for a response from the cabinet before deciding on the next action to take.
Disagreement with Uganda’s Government caused licence delay for MTN Uganda
MTN Uganda‘s struggle to renew its licence began after Uganda’s President, Yoweri Museveni, criticised the Uganda Communications Commission for offering MTN Uganda a ten years licence for half the fee.
The network regulator had initially concluded on charging MTN Uganda $58 million, far below the $100 million set for renewal. President Museveni wrote a letter criticising the commission.
Why UCC had decided to charge MTN Uganda less: In response to the President’s criticism, the Ugandan Minister for information, Communication, Technology, and National Guidance said due to MTN Uganda‘s disclosure that the company would have to invest about $200 million to meet the conditions of a new national broadband policy, UCC decided to cut MTN Uganda‘s fee to $58 million.
Telecom operators are required to invest in infrastructure for better voice calls service and high data speeds across the country.
MTN Uganda has more than 10 million subscribers and competes chiefly with India’s Bharti Airtel.
Meanwhile, MTN Nigeria is going through its own regulatory tussle in Nigeria. With several fines imposed on the company by both State Government and the Nigerian Communications Commission (NCC).
MTN Nigeria leads the telecoms industry with 45 million subscribers, Airtel comes second with 30 million subscribers in Nigeria, Globalcom accounts for 27 million subscribers, while 9mobile has 9 subscribers.