For close to a year now, MTN Uganda has been negotiating with Government to have its permit renewed after the initial 20-year licence to operate in Uganda expired on 20th October 2018.
There has been a lot of delay since then, fired up by numerous terms set up by the Communications Commission as well as stumbling blocks involving battles with the authorities. The company has been riding on temporary permits all along.
Among the terms put across in the negotiation included listing the telecom company on the Uganda securities exchange market, as well as having a nationwide 4G coverage – something like what Airtel has to offer.
This requires the company to become partly locally owned; and also invest in network upgrade to ensure that all villages of Uganda have uniform access to fast and reliable internet.
The biggest obstacle to the licence renewal has been the renewal fees. At the time MTN applied to have it renewed, UCC sought to charge them $100 million for a renewal. The company is said to have responded with a $22 million request, to which the two parties eventually agreeing on $58 million for 10 years.
But this was dismissed by President Museveni, who was asked to review and verify the granting of the licence, who found the amount agreed upon so distant from the initial $100 million required of the company.
The president, following a meeting between President Yoweri Museveni and MTN Group Chief Executive Officer Robert Shuter, asked MTN Uganda to widen its local shareholding by selling a stake of its shares to the National Social Security Fund (NSSF). This was reached as further negotiations on the final fees were on going.
Increased licence fees
According to Daily Monitor, MTN will now be required to pay at least $118 million (UGX 438 billion) for a 10-year licence. If the company wishes to have the permit for up to 15 years, they will have to part with $150 million (UGX 557 billion).
Mr Ibrahim Bbosa, the UCC spokesperson, stated that the amount is on the basis of the company’s projected annual gross revenue, and it will be a 2% charge which was arrived at by the Ministry of Finance.
“Government closed at a position of charging 2 per cent of projected annual gross revenue for the licence.”
– Mr Ibrahim Bbosa, the UCC spokesperson, told Daily Monitor.
MTN Uganda’s revenue in 2018 grew by 8.6% due to increased voice calls, data usage and MTN Mobile Money.
Another temporary licence
As the negotiations are finalized, MTN Uganda’s licence is yet again on another 90-day temporary extension up to May this year. In the mean time, MTN has asked for clarification from the government on the increase in fees, after which it will have to choose either of the 10 and 15-year licences.
