Cabinet has approved the renewal of the license for telecommunications giant, MTN Uganda for an additional for an additional 10 year, but with stringent terms. MTN Uganda’s licence which was first issued in 1998 is set to expire in October of this year.
The Minister for ICT, Frank Tumwebaze told reporters on Tuesday that Cabinet during its sitting on Monday at State House Entebbe had given MTN Uganda a green light to operate in the country for another decade.
MTN Uganda which is a subsidiary of the South African telecom giant, MTN Group has been operating in Uganda for the last two decades and currently has the biggest coverage as well as subscribers (over 11 million).
“Cabinet was briefed and noted the process of the renewal of MTN Uganda operator license for a period of 10 years,” Tumwebaze said on Tuesday.
“The Minister of ICT was given a go ahead to give a no objection to UCC to renew the license with new stringent terms in pursuit of the broad band policy goals,” he added.
The approval of the licence follows months of evaluation by the communications regulator, UCC of MTN Uganda’s performance, quality of its services as well as compliance to regulations over the last 20 years.
In March, UCC conducted a public hearing inorder to gage public opinion regarding the performance of MTN as prerequisite for deciding whether or not to extend its operations.
During the engagement, majority of the participants supported the renewal of the telco’s licence citing the remarkable achievements it has registered in voice calls, devices, internet as well as financial services like Mobile Money.
According to UCC’s preliminary assessment of MTN’s compliance and performance over the last 20 years, the telco largely qualifies to have its license renewed. However, the regulator had some reservations some of them financial, technical and competition related inefficiencies.
For example, MTN Uganda was faulted for non payment of Shs 27 million in inspection fees, erroneous billings to some customers, delayal/denial of service to value added service providers and being unfair to other companies in sharing infrastructure like towers.
UCC also faults MTN for failure to resolve 24.5% of customer complaints within the 24 hour threshold in the last two years.
The other outstanding issue raised by the users during the engagement in March was the failure by MTN Uganda to list on the stock exchange in Uganda.
Many said that it was important for the telco to list in order for Ugandans to have a stake in the services as well as to reduce the large capital flight which is repatriated to South Africa.
The telco is listed in Ghana, Zambia and partly in Rwanda.
On Monday, Cabinet noted that a lot had changed over the last 20 years since MTN Uganda was granted an operator licence, thus the need for the terms for the new licence to focus more on quality of services, reliability as well as affordability.
Cabinet resolved that all local operators list on the local stock market to help mitigate capital flight among other benefits of local content development opportunities that come along.
Other conditions for licensing include the ability for a service provider to cover the entire geographical place of Uganda as well as for its users to have the ability to roam while outside the said area.
In addition, limitations were placed on the ownership and management of the spectrum which government says should not be owned by private entities since it is a scarce and finite resource.
MTN Uganda is the biggest tax payer in Uganda, contributing Shs 450 billion annually, on top of creating employment and revolutionizing the telecommunications sector.