MTN Uganda required to pay UGX 51bn in license fees

Following a ruling from the High court, MTN Uganda required to pay UGX 51bn in license fees as the Uganda Communications Commission (UCC) demands this amount from the telecommunications giant. The government regulatory body demanded the said amount last year as it wrote to MTN asking it to pay a license fee for the transitional period of October 21, 2018, to June 30, 2020.

During this period, MTN didn’t have a running telecom license which had expired in October 2018.

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MTN Uganda required to pay UGX 51bn in license fees after court ruling decides

According to The Observer, in October 2017, MTN applied to UCC for a renewal of its second national operator license which was due for expiry in October 2018. UCC determined 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.

However, in 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.

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Things began to become complicated as UCC indicated that MTN would be required to pay license fees for the transition period between October 2018 and June 30, 2020. Consequently, in July 2020, UCC issued a demand stating that MTN Uganda required to pay UGX 51bn in license fees for the transition period.

However, MTN did not agree with the premise under which the regulator evaluated the fees due. It ran for a lawsuit to restrict UCC from implementing its decision and to interfere in or interrupt MTN operations in any way.

In its application, MTN asked court to prohibit UCC from unilaterally determining and levying the license fees for the transition period saying they are not prescribed by law. In defense, UCC 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, MTN refused the 14 years and decided to sign for 12 years on an understanding that a separate fee of Shs 51billion was to be paid on a prorated basis for the transition period.

MTN Uganda required to pay UGX 51bn in license fees after decision delivered electronically justice Musa Ssekaana where he ruled that there was no procedural impropriety in the decision made by UCC in imposing transition fees based on a pro-rated assessment.

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