MTN Uganda License To Be Renewed; Telecom To List on Local Stock Market

The Uganda Government has agreed to renew the license of telecom operator, MTN Uganda with “stringent terms” including listing on the local stock market, officials said Tuesday.

MTN, whose 20-year license is expected to expire on October 20, 2018, has in recent years been accused of falling short on quality of service and non-compliance with regulations set by the Uganda Communications Commission (UCC).

Uganda’s Information and ICT Minister Hon Frank Tumwebaze announced today that Cabinet gave him “a go ahead to give a no objection to UCC to renew the license with new stringent terms in pursuit of the Broadband Policy Goals.”

It was noted that “when the then Minister of Works and Communications issued the first license to MTN in 1998, the challenges then were different.  The concern then was more about telephony penetration which MTN and other operators helped to achieve.”

The Minister explained that the licensing conditions then were not “stringent enough about the quality of service obligations as demand and uptake of voice and data service was low. The concerns of today are mainly about reliability and affordability of services.”

Some of the licensing conditions set for all telecom service providers including MTN are national coverage – whereby every operator must be able to cover the entire geographical place of Uganda so as to enable universal access, promote effective competition and quality of service.

At its sitting on Monday, Cabinet also decided that private telecoms should not own the spectrum as it’s a finite and scarce government resource that needs to be managed and utilised efficiently, optimally and rationally.

“These resources should not be owned by the private telecom service providers,” said Tumwebaze in a statement today.

He said this is also intended to outlaw hoarding of spectrum and enable realisation of economic value of the spectrum through re-farming.

Tumwebaze explained that the principle for all operators will be “use it or lose it” and no operator whenever selling its stake through mergers and acquisitions should ever have a claim on spectrum.

Switching

MTN, just like other telecoms, will as well ensure that customers are able to switch from one service provider to another without changing the telephone numbers.

Tumwebaze said this is aimed at empowering customers to choose their service provider without the challenge of changing telephone numbers.

Listing

According to the Cabinet decisions, all local operators as a licensing condition will have list on the local stock market to “help mitigate capital flight among other benefits of local content development opportunities that come along.”

Experts say capital flight is eroding the benefits of Foreign Direct Investment (FDI) in Uganda.

Whereas Uganda is one of the countries which have registered the highest FDI on the African continent since the 1990s, there is little to show for it.

The media recently reported that MTN was looking at a phased opening with the first stage ensuring that Ugandans who have grown with the company get meaningful participation before opening up to the rest of the market.

MTN apparently prefers a phased approach under which it would first bring Ugandan pension funds on board through a private share offer, before eventually opening up through an IPO,The telecom is also expected to list in Ghana and Nigeria.

UCC Survey

UCC recently carried out an evaluation of MTN’s performance and assessed the level of fulfillment of those obligations.

MTN had by the end of the first five years duly complied with the financial and legal obligations ad covered most of the technical obligations.

MTN recently submitted its application for a single term renewal of the license for ten years.UCC blamed the telecom for refusing to revise their domestic interconnect fees to Shs 112 from Shs 115 just like other operators.

The telecom was also accused by third party access seekers (aggregators and value added service providers) of denial/delays in provision of service, discriminatory trade terms, unfair pricing, unclear vetting criteria, delayed reconciliation of revenues amongst others.

It also was faulted for registering delays in resolving consumer complaints within 24 hours.

With respect quality of service standards issued by UCC in 2007, MTN’s quality varied in performance with various instances of not realizing the targets specified by the commission.

MTN said it was “not possible to have a consistently good quality of service throughout its license period.”

UCC said whereas MTN has to a large extent complied with most of its license and regulatory obligation, there are number of outstanding areas of non-compliance which must be addressed before the Commission progresses the application for renewal of MTN’s license.

The research conducted by UCC literally gave MTN a clean bill of health.“MTN has largely provided uninterrupted telecommunications services during the course of its license in accordance with the laws of Uganda,” said UCC in a report released March, 2018. – Chimp Reports